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Research: Powerless Chiefs, the Key to Effective Democratic Company Governance?

Research on Democratic Company Governance
Published on
10 January 2017

Member-based organizations such as co-operatives are built around the concepts of democracy and equality. However, not all co-operatives are successful in maintaining their egalitarian approach. This latest study explores an innovative perspective on how to maintain a democratic governance structure in member-based organizations.

This article from Stéphane Jaumier is the subject of the 32nd GEM LAB Executive Summaries.

From the article

Preventing chiefs from being chiefs : an Ethnography of a co-operative sheet-metal factory Organization
I-22 DOI: 10.1177/1350508416664144
Stéphane Jaumier

To carry out this study, the researcher spent one year as a participant and observer of the day to day activities of Scopix, a French co-operative. The organization was set up 30 years ago and now employs approximately 25 employees, almost all of whom are also associates in the co-operative.

The danger of oligarchy

One of the primary threats to a co-operative's democratic structure is the emergence of a governing elite. Several factors have been demonstrated to help alleviate this risk; for example, working in a niche market with little competition from capitalist organizations, or devising and implementing specific rules to support egalitarian and democratic practices. In this latest study, the researcher proposes a third path to support democratic practices, namely that of delegitimizing a co-operatives elected chiefs.

A supervisory board that hardly supervises

Scopix operates with a supervisory board and an executive board. The supervisory board is comprised of three members elected in what the researcher describes as a popularity contest. The supervisory board then nominates three members to sit on the executive board. Following this nomination, the supervisory board takes a back seat while the executive board is responsible for managing the company.

After a year within the organization, the researcher suggests that three types of day to day practices contribute to sapping the power and legitimacy of executive board members. In other words, the researcher observed that while the chiefs were nominated to run the organization, they in fact retained very little concrete power to enforce rules or guide the business's activities and strategy.

Poking fun at your boss, a democratic practice?

Workfloor games such as yelling "Who's the boss?" and responding "I'm the boss!" served as a constant reminder that each member was in fact a chief.

The first day to day practice that delegitimized a chief's position was the active and relentlessly voiced refusal to accept a divide between chiefs and lay members. Workfloor games such as yelling "Who's the boss?" and responding "I'm the boss!" served as a constant reminder that each member was in fact a chief.

The second practice was the endless and overt critiquing of chiefs. Conflicts and issues were openly discussed on the workfloor. The result was a permanent requirement for accountability by chiefs, a fact that set up a reverse dominance between lay members and chiefs. The third practice was the use of schoolboy humor, which often served to convey criticism in a manner that was difficult for chiefs to respond to in a legitimate manner.

This study highlights the fact that there are still ways for democratic member-based organizations to avoid oligarchization. The researcher suggests that future research would benefit from focusing on day to day activities and the perspective of co-operative members.

Key points

  • The emergence of a governing elite is a primary threat faced by member-based democratic organizations such as worker co-operatives.
  • Past research highlights niche markets, little capitalistic competition and democratic rules as possible solutions to maintain a co-operative's egalitarian structure.
  • This latest study highlights that informal day to day practices such as criticism and humor can delegitimize elected chiefs and thereby help maintain an organization's democratic structure.

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