IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Styrelsens roll och uppgifter i det lantbrukskooperativa företaget

Listed author(s):
  • Heimbrandt, Andreas
Registered author(s):

    As the modern firm has continued to grow and its owner base has widened, the owners' opportunities to exert influence has diminished. While the board of directors is a strategic resource available to management it is also the owners' primary tool for exercising control. To a large extent research on the role of the board of directors has focused on the relationship between various characteristics of the board and the firm's financial result. Research literature within the field of corporate governance has established three primary roles for the board of directors; setting strategy, controlling management and being a resource available to management. The vast majority of research within the field is primarily based on investor owned firms. This study focuses on the cooperative firm. The board of directors in cooperative firms is somewhat uncharted territory, yet there are reasons for asking how, if at all, a firm's cooperative basis might influence the roles and tasks of the board of directors. In a cooperative context, questions such as; "To what extent is the job of the board of directors affected by not profit maximising operations?" and "How does a board handle the fact that the owners themselves are also suppliers and customers?" are acutely relevant yet relatively unexplored. The overall aim of this licentiate thesis is to further the knowledge and understanding of the composition, roles and functions of the board of directors in a producer cooperative firm. The purpose is pursued by posing questions concerning the board of directors and its roles and functions as described in the general corporate governance literature, while considering the board in a cooperative firm model. The frame of reference rests on previous research and relevant models concerning the roles and functions of the board of directors. Empirically, the thesis builds on a case study of a large Swedish producer cooperative firm, Lantmännen. Findings show that the board of directors in a cooperative firm may differ from those of investor owned firms on several important points: When there are many owners of a firm, the owners are often considered weak, even to the extent that we begin to speak of "the ownerless firm". The producer cooperative firm Lantmännen uses an ownership model where every member has one vote, which potentially could lead to weak owners. The members have, by their numerous points of contact with the firm and other owners, created a number of compensatory mechanisms that increase their power. Thus, Lantmännen's members are powerful. The owners interact with the firm as customers, suppliers and elected representatives on various levels in the firm. Moreover, there is a well structured member organisation that facilitates the organisation of members. Regarding the composition of the board of directors, it is evident that member representation is very strong. The firm has no external members on the board, and the composition clearly reflects the various interests of the owners. The competence of the board of directors is particularly strong in matters related to the members' exchanges with the firm as suppliers or customers. In spite of the fact that the firm has significant operations abroad, Lantmännen has refrained from bringing in more external competence on the board to develop its international profile. In regard to the roles and functions of the board, the case shows a particularly advanced control function. Lantmännen can be said to constitute an anomaly in the agency theory perspective, in that it does not actively employ managerial incentive programmes but rather relies on monitoring and control of the CEO. The board of directors has good knowledge of what goes on at all levels of the firm, thanks to its presence on the divisional boards of directors. At the same time, however, there is evidence that the development of the strategic role of the board of directors has been held back for the benefit of a stronger control function. As this study includes only a single firm, we should be cautious in drawing any general conclusions about the cooperative business model with regard to the roles and functions of the board of directors. However, the findings in this study clearly indicate that the boards of directors in a producer cooperative firm may develop their roles and function and have different priorities than those suggested in the traditional corporate governance literature. Only additional studies of other producer cooperative firms can establish the transferability of the results of this study to other cooperative contexts, but this study raises issues that can contribute to our understanding of both boards of directors and cooperative firms.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Paper provided by Swedish University of Agricultural Sciences, Department of Economics in its series Department of Economics publications with number 1473.

    in new window

    Date of creation: 2007
    Handle: RePEc:sua:ekonwp:1473
    Contact details of provider: Postal:
    Box 7013, 750 07 UPPSALA

    Phone: 018-67 1724
    Fax: 018-67 3502
    Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:sua:ekonwp:1473. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alejandro Engelmann)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.