What co-ops can teach you

There is even more for housing associations to learn from the cooperative business model than Mike Gaskell mentions in his article "From baked beans to social housing" (6 February, page 39).

The key to the co-ops' success in the past 150 years lies, first, in a democratic ownership with each shareholder having only one vote. Second, the principal objective was to serve their shareholding members and the local community in a socially responsible way, any surplus being returned to the members in relationship to patronage of their society. For the past 80 years, a central cooperative college provides courses for employees and board members. In a recent development of their governance, some societies require board members to attend a series of courses on core skills of society management.

Gaskell, like many, raises the issue of the difficulty of recruiting and training suitable board members. Given the adoption of a cooperative model, and the time, these problems will resolve themselves.

The cooperative experience has been that, given the opportunity to become involved, members gain the necessary confidence and experience to run complex cooperative societies and even go on to become involved in local and national politics. The retail co-operatives in the UK operate tens of thousands of shops, a major bank, insurance society and are the UK's largest farmer, funeral director and independent travel agent and they have a huge property portfolio including housing.

The skills of management required of a retail cooperative board are very similar to a housing association and cooperatives still rely on lay volunteers, who are democratically elected.

So, what are the lessons to be learned? First, trust and empower the people. When homes were owned by councils they were democratically controlled by councils. Now, owned by associations, they are in a Victorian nanny-state quango model. The associations borrowed money to buy the houses from the council and now own them in trust, I assume, for the tenants – who else?

Why, then, cannot the tenants have a share with a single vote and directly elect their boards from among tenants? If a period of transition from nanny state to democracy is required, how about five years to gradually change to total tenant control? Once people are allowed and encouraged to have a real say in the management of the associations, more people with commitment and knowledge with emerge.

Is there a case for employee participation on the board? In some retail cooperatives it has long been the case that up to 10% of the directors can be employees. They have to take their chances in the elections, but their special interest is recognised.

If housing associations went down this route, there should be enough employee tenants eligible to stand, assuming they wanted to.

Allowing a proportion of the employees to sit on the board might bring people with direct experience of housing into the strategic decision-making and monitoring process. But such employees could come with their own agendas, and interesting situations could arise, as they do in co-ops, when senior executive benefits and performance are being reviewed.

I get the impression that issues of governance are being raised and considered, to move further away from democracy.

The practice in the past was that the role and function of full-time executives was to use their experience and skill in managing the day-to-day operations and advise the lay board on strategic issues.

The board's role is surely not to duplicate this but to consider and make strategic decisions and monitor the performance of the officials. If they needed a second or more specialist opinion, outside consultants could always be consulted.

The board with qualifications and experience in housing could, however, be seen as much as a disadvantage as an advantage. In early cooperatives, the committee were often involved in working in the shop and quickly realised the value of the division between specialist management and part-time lay directors.

Finally, can someone explain why it was OK to spend billions and kill thousands to attempt to install a "democratic" government in Iraq, but it is not acceptable for our tenants to run their own housing associations?