A Cooperative is a society formed by at least 20 people and must be managed in a democratic and participative manner, with common economic and social objectives. Therefore, the members, their leaders, and representatives hold full responsibility for its management and oversight.
In practice, they differ from other companies by having principles related to humanism, freedom, equality, solidarity, and rationality. Moreover, their decisions need to be made collectively, with the participation of the members. The main purpose is to meet the economic needs of all members, and there is also profit distribution according to each member’s investments.
Despite the significant differences between traditional companies and cooperatives, cooperatives also face challenges related to corporate management. One of the main challenges is the implementation of Corporate Governance, which can directly impact all areas, such as finance, people management, sustainability, and others.
What is Corporate Governance?
To recap, Corporate Governance is a set of processes, customs, and laws that guide how an organization is managed.
Using the definition provided by the Brazilian Institute of Corporate Governance (IBGC), we summarize it as a system through which companies and other organizations, including cooperatives, are directed, monitored, and incentivized, involving the relationship between shareholders, the board of directors, management, and oversight and control bodies.
Its purpose is to strengthen the organization and align the interests of the company, its shareholders, directors, stakeholders, and regulatory bodies.
Among the main benefits of Corporate Governance, we highlight:
- Ensuring that processes and strategies are being correctly followed;
- Promoting a culture of accountability within the company;
- Enhancing the company’s image through ethics and the promotion of corporate values;
- Positively contributing to the company’s market value and competitiveness;
- And complying with the principles of compliance, as Corporate Governance and Compliance go hand in hand, as both are synonymous with “being in compliance.”
Corporate Governance and Cooperatives
For a cooperative to succeed, it is necessary to balance the social dimension, focused on the development of its members, and the economic dimension, focused on business performance. This is where Corporate Governance comes in!
It plays a role in the agile and efficient resolution of conflicts by having a contingency plan for conflict resolution, which facilitates decision-making under pressure.
It provides members with historical data for decision-making, guiding long-term administrative planning, requiring only alignment and follow-up meetings for Corporate Governance.
In terms of reliability, governance helps direct administrative efforts by proposing actions fully aligned with strategic objectives.
As a result, it strengthens trust among stakeholders, especially clients and members, ensuring that all demands are met with the necessary care and attention to continuously improve processes and market competitiveness.
Challenges Faced
One of the biggest challenges cooperatives face in implementing Corporate Governance is securing the commitment of all stakeholders, including members, leaders, and employees.
Moreover, significant changes have been made in the cooperative economy, requiring management models to be updated at the pace demanded by the market.
Another challenge is the need for software that can manage Corporate Governance, tailored to the specific needs of cooperatives, capable of handling the vast amount of information and data that circulates daily, and that can be integrated with other systems or allow for additional integrated management functionalities.
However, this can be addressed with Interact Suite SA.
Interact Also Offers Solutions for the Cooperative Sector
Interact Suite SA, a Corporate Governance software, can enhance digital transformation in cooperatives. It enables them to manage, analyze, and make strategic business decisions, all with the security that Interact software provides.
Among the solutions available for this sector, we highlight ESG – Environmental, Social, and Corporate Governance, BCP – Business Continuity Planning, GRC – Governance, Risk, and Compliance, Data Protection Management, Strategic Management, Quality Management, and more.
Visit our website to learn about our solutions and enhance your cooperative with integrated management and innovation, essential for maintaining market competitiveness and operational optimization.
Author:
Bianca Wermann
Journalist, Communication and Marketing Analyst at Interact Solutions.
