The Benefits of Building More Diverse Cooperative Boards

Over the course of the last year, many businesses and organizations have recognized their lack of diversity. Harvard Business Review reported that “in a fall 2020 analysis of the 3,000 largest publicly traded U.S. companies found that just 12.5% of board directors were from underrepresented ethnic and racial groups, up from 10% in 2015. The report also found that only 4% of directors were Black, while female directors held 21% of board seats.”

As directors, management, and employees address the lack of diversity on their board, the co-op community has developed more and more research about the benefits of board diversity. From individual cooperatives sharing their success with building diverse boards to development organizations researching the impact of diversity on cooperative boards, the response has led to more diversity, equity and inclusion initiatives hoping to create more representative cooperative boards.

The growing need for more diverse cooperative boards has led to new research analyzing issues, needs, and benefits to creating a diverse board. Below, I will explore recent research revealing the benefits of diversity on boards.

Better Understand and Represent the Co-op Community

Diverse boards bring together more backgrounds, experiences, and ages to engage in the  decision-making process. When directors better represent their member-owners, their decision-making can better reflect the cooperative members, emphasizing democratic member participation, the second cooperative principle. By bringing together directors with different geographic backgrounds, sexual orientations and genders,  and/or races or ethnicities, among many other characteristics, boards that foster diversity better represent their community and make better-informed decisions for the cooperative and its member-owners.

Oklahoma State University’s Dr. Phil Kinkel found in “The Need for Board Diversity in Agricultural Cooperatives” that board diversity can help a board “relate to its internal and external stakeholders.” For example, women are an important part of the employee teams at cooperatives and “female representation on the board gives those employees a greater sense of connection with the cooperative and improves the perception of a career path.” Board diversity allows cooperatives to understand and serve both their member-owners and employees.

Better Change Styles 

Another benefit of building a diverse board of directors is the advantage that the diversity of experiences and knowledge brings to change management. The unique perspectives that each director brings to the board room can help guide the cooperative through both low risk change and high risk change that may threaten the sustainability of the business.

Dr. Phil Kinkel has found that cooperative diversity led to better change management. In his study of gender diversity on agricultural boards, Kinkel stated, “[b]oards with greater gender and age diversity appear to make better decisions, particularly when dealing with strategic issues or organizational change.” This research pushes boards to think about how diversity of ideas and experiences can benefit the entire cooperative.

In a recent blog about the value of board diversity, Ohio State’s Fisher College of Business shared research findings indicating that by having more diverse human capital, companies can better navigate “disruptive change.” The study conducted in 2018 by Bernie, Bhagwat, and Yonkers found that the “aggregate skillset” and diverse experience on more diverse boards changed the outcome of more volatile changes in the company. By including individuals with a diversity of experiences, boards can lead better together through economic, business, and social change.

As recent research has shown, cooperatives have both a social interest and a business interest in building diverse, equitable, and inclusive boards and many cooperatives are approaching board recruitment and development with renewed focus on diversity, equity, and inclusion to build more representative and sustainable enterprises. Harkening back to the seven guiding cooperative principles, diverse boards better serve their members by staying true to the democratic foundations of cooperation.

 

For more inormation:

https://fisher.osu.edu/blogs/leadreadtoday/navigating-disruption-why-board-diversity-leads-better-outcomes

https://hbr.org/2021/03/you-say-you-want-a-more-diverse-board-heres-how-to-make-it-happen

https://extension.okstate.edu/fact-sheets/the-need-for-board-diversity-in-agricultural-cooperatives.html

Cooperative Leadership Forum Offers a Valuable Learning Opportunity

The Mid America Cooperative Council (MACC), an organization representing over 100 cooperatives in Ohio, Indiana, Illinois, and Michigan, is offering a unique leadership training for co-op employees, board members, and other prospective leaders. The sessions on February 21-22 and March 6-7 in Oxford, Ohio will include tours of successful cooperatives in various sectors, sessions on leadership and management, and talks with cooperative leaders from across Ohio, among other activities.

MACC Executive Director, Rod Kelsay, talks with forum participants about how to develop their personal leadership skills.

In 2016, staff members of the OSU South Centers had the opportunity to participate in the forum, which included tours of Butler Rural Electric Cooperative, Inc. and CHACO Credit Union as well as visits from representatives of Miami University Credit Union, Dairy Farmers of America, and COBA/Select Sires. The various speakers shared how their co-ops benefit members, how they are governed, and the services they provide to members. Each highlighted their “cooperative difference,” including their prioritization of members’ needs, education efforts, and concern for community. OSU South Centers’ Kimberly Roush, explained the inspiration she gathered from visits to local co-ops. “I noticed an interesting result of the cooperative environment during the leadership forum—the overall culture of the cooperative employees who spoke with us.  The staff explained specific details about the reason for and the function of their cooperatives. Then they shared something more—talking about member activities and interaction with the community.  It was exciting to learn how the cooperative principles permeate the local culture.”    

Not only did staff learn a great deal from various guest speakers, the forum was an opportunity to network with and learn from other participants who worked across various sectors like credit unions and agricultural marketing and supply co-ops.

To learn more about the 2018 Cooperative Leadership Forum, visit http://editor.des08.com/macc/Brochure_CLF_2018.pdf. Contact MACC with any questions at (317)-726-6910 or knowledge@macc.coop.

The Ohio State University CFAES launches a new integrated Center for Cooperatives

Center for Cooperatives reception at the OSU 4H Center in Columbus, Ohio Wednesday October 18th, 2017. (Christina Paolucci, photographer)

Friends of Ohio’s cooperatives joined the College of Food, Agricultural, and Environmental Sciences and OSU Extension to celebrate the newly established CFAES Center for Cooperatives at the Nationwide & Ohio Farm Bureau 4-H Center on October 18th, 2017.

The celebration commemorated the 2017 National Cooperative Month of October. The event also coincided with Ohio Cooperative Week designated by Governor John Kasich as October 15-21, 2017 in a Resolution presented to Mid-America Cooperative Council Executive Director Rod Kelsay at the event.

Dr. Graham Cochran, CFAES Senior Administrative Officer, welcomed cooperative leaders from United Producers, Select Sires, Nationwide, the Ohio Farm Bureau, and others to the event, and shared the college’s commitment to organizational development and workforce preparation. Associate Dean and Director of OSU Extension Dr. Roger Rennekamp highlighted the importance of cooperatives and how the Center will be part of the overall network of OSU Extension programming to reach stakeholders in all 88 counties of Ohio. Dr. Tom Worley, Director of the new Center, announced the University has been awarded a Rural Cooperative Development Grant totaling approximately $200,0000 to improve rural areas of Ohio and West Virginia through the development of cooperatives and other mutually-owned businesses. Debbie Rausch, from the Ohio office of USDA Rural Development spoke to the group, highlighting the College’s 18 years of USDA cooperative development efforts.

Along with Worley, Dr. Ani Katchova is leading research programs for the Center and Hannah Scott is serving as leader of Extension and outreach activities. Programming for the Center will occur within and link all major mission areas of CFAES, including teaching, research and Extension. This integration is expected to extend knowledge to emerging and established agricultural cooperatives and support rural economic development. Furthermore, the Center will provide students and agricultural professionals with more interdisciplinary training and research opportunities.

“The CFAES Center for Cooperatives is expected to be comprehensive and bring together all three mission areas of the College – teaching, research, and Extension. We are very pleased to be well positioned to serve the wider cooperatives community in Ohio through the combined faculty and staff resources of the Center,” OSU South Centers Director Tom Worley said.

The Center maintains staff based in Piketon, Ohio and also has faculty presence on the Columbus campus. It will integrate the College’s current activities and operations that support cooperative business development, engage directly with long-established cooperatives, and provide cooperative education both in the classroom and via Extension and outreach programs.

 

Welcome to Collaboration Nation

The Ohio State University CFAES Center for Cooperatives has a brand new blog!

The blog features cooperative businesses, current events and research. It showcases leaders in the cooperative movement and gleans best practices. Collaboration Nation is all about building great teams and working together to achieve goals.

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