SHIFTING CONTROL? THE CHANGES OF INTERNAL GOVERNANCE IN AGRICULTURAL COOPERATIVES IN THE EU

Abstract

ABSTRACT Governance describes a firm´s system of decision‐making, direction and control. Over the last decades agricultural cooperatives in Europe have been pursuing innovations in internal governance structures. As a response to changing market environments, cooperatives adjust the size and composition of boards, the labour division between supervision and management and the representation of members‐owners. Changes in the cooperatives´ internal governance mechanism are motivated by the need to enhance market orientation, attract professional managers, strengthen member commitment, and reinforce entrepreneurship. We present data on innovations in the internal governance mechanisms of a sample of 500 agricultural cooperatives in the EU. In addition, we present theoretical explanations for these innovations, and we discuss their implications for member control and manager accountability, as well as for performance and further development of the cooperatives.