The factors influencing the quality of the relationship between the board of directors and the manager of a cooperative

Details

Supervisors

Sarens, Gerrit

Faculty

Louvain School of Management

Degree label

Master [120] en Ingénieur de gestion

Abstract

Cooperatives tend to face more governance problems than other types of companies, because of the way they are organised. One aspect that might be problematic is the relationship between the manager and the board of directors. Still today, some cooperatives choose not to engage a professional manager and to let the board of directors run the organisation. This thesis focuses on the factors that affect the quality of the relationship between the board and the manager, and more precisely on two of them: the roles and duties of each party, and the characteristics that positively influence the quality of the alliance. It analyses agricultural cooperatives where the owners are also suppliers of the cooperative. Furthermore, it makes a comparison between Belgium and Norway. After going through the theoretical concepts, a qualitative study uses interviews with members and managers of cooperatives both from Belgium and Norway in order to make the comparison. The study finds that Belgium and Norway do not significantly differ on the two specific factors: cooperatives in both countries agree that those factors positively influence the quality of the relationship, and also more or less concur on what these roles and characteristics should be. Another important factor is however identified: the structure of the internal governance. The study concludes on the fact that cooperatives should take all those three factors into account when organising their governance in order to maximise their chance of having a good relationship between the board of directors and the manager.