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Corporate governance as a key aspect in the failure of worker cooperatives

Author

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  • Imanol Basterretxea

    (Faculty of Economics and Business, University of the Basque Country UPV-EHU, Spain)

  • Chris Cornforth

    (Department of Public Leadership and Social Enterprise, Open University Business School, UK)

  • Iñaki Heras-Saizarbitoria

    (Faculty of Economics and Business, University of the Basque Country UPV-EHU, Spain)

Abstract

The article analyses governance difficulties at Fagor Electrodomésticos, for decades the world’s largest industrial cooperative, and sheds light on how the cooperative model and governance might have contributed to the firm’s bankruptcy. The case study examines how the cooperative model influenced the speed and quality of decision making. The roles of the main cooperative governing bodies (the General Assembly, Governing Council and Social Council) are evaluated and their limitations to effectively supervise and work with management to make difficult strategic decisions. Several governance improvement measures are proposed in order to help other large cooperatives combine democratic control and economically sound governance.

Suggested Citation

  • Imanol Basterretxea & Chris Cornforth & Iñaki Heras-Saizarbitoria, 2022. "Corporate governance as a key aspect in the failure of worker cooperatives," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 43(1), pages 362-387, February.
    • Handle: RePEc:sae:ecoind:v:43:y:2022:i:1:p:362-387
    DOI: 10.1177/0143831X19899474
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    References listed on IDEAS

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    2. Emilie Bourlier-Bargues & Jean-Pascal Gond & Bertrand Valiorgue, 2022. "Fast and spurious: How executives capture governance structures to prevent cooperativization," Post-Print hal-03828145, HAL.
    3. Lidia Valiente-Palma & María del Carmen Pérez-González, 2023. "Underemployment due to overeducation: An analysis of worker cooperatives versus conventional firms," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 44(3), pages 910-932, August.

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