Page 1 Building Partnerships Toward Cooperative Sustainability A Presentation to the Philippine...

Building Partnerships Toward

Cooperative Sustainability

A Presentation to the

Philippine Institute of

Certified Public Accountants (PICPA)

& the Coop Sector

Gary O. Leonardo

Outline of the Presentation

l. Sustainability in Perspective

ll. Sustainability in the Cooperative Setting

lll. Possible Areas of Partnership

Main references: Various presentations made during the Finance Cluster Congress in Tagaytay last April 2015; “Credit Union Social Responsibility:Sustainability Roadmap” (Coro Strandberg)

Part l: Sustainability in Perspective

e

Sustainability

- Corporate Social Responsibility

- Corporate Citizenship

- Cooperative Social Responsibilty

- Triple Bottom Line (Social, Environmental, Economic)

- People, Planet, Profits

- People, Planet, Prosperity, Peace

ISO Document on CSR ( ISO 26000 ): 7 Principles of Social Responsibility

- Accountability

- Transparency

- Ethical Behavior

- Respect for Stakeholder Interests

- Respect for the Rule of Law

- Respect for International Norms of Behavior

- Respect for Human Rights

But Sustainability or CSR is not new to the Coop Sector

“A cooperative is an autonomous and duly registered association of persons with a common bond of interest, who have voluntarily joined together to achieve their social, economic and cultural needs and aspirations by making contributions to the capital required, patronizing their products and services and accepting a fair share of the risks and benefits of the undertaking in accordance with universally accepted cooperative principles”

(from a training module of CDA/CEF)


- Coop: Service and profit; people helping people

- Anchored on the 7 Coop principles:

Voluntary and open membership

Democratic member control

Member economic participation

Autonomy and independence

Education, training and information

Cooperation among cooperatives

Concern for community


The 7th Principle states in full:

“Cooperatives work for the sustainable development of their communities, through policies approved by their members”


Coops may just need to raise the bar as regards CSR

Re-invent if need be

Revisit/renew relationships with stakeholders

New differentiation strategy (versus private companies that are now also into CSR)

Part ll: Sustainability in the Cooperative Setting

e

International Cooperative Alliance (ICA): Blueprint Strategy

- Elevate participation within membership and governance to a new level

- Position coops as builders of sustainability

- Build the coop message and secure the coop identity

- Ensure supportive legal frameworks for coop growth

- Secure reliable coop capital while guaranteeing member control

ICA 2020 Vision for Cooperatives

- The acknowledged leader in economic, social and environmental sustainability

- The model preferred by the people

- The fastest growing form of enterprise

Asian Confederation of Credit Unions (ACCU): 2020 Vision

- Integrated and sustainable credit union networks

- Demonstrating market differentiation

- An institution sought by ordinary people

- Maintain the coop DNA (business with a wider social engagement)

ACCU: Why Integrate? We have an Emergency!

- Unsupervised lending (uncontrolled delinquency remains

an issue)

- Capital erosion (10% minimum institutional capital ` not complied?)

- Mission drift (unspoken crisis facing employees and leaders)

- Unnecessary competition among coops

- Question on lifetime member value (are the needs of our members at the center of the coop business?)

- Governance (integrity, competence, accountability, fairness)

Cooperative Development Authority (CDA):

- One of its Key Result Areas (KRA's): Rapid, inclusive and sustainable growth

- Where are we now? Database management, cooperative profiling, data analysis

- Where do we want to go? Social justice, equity, sustainable development

- How do we get there? By putting people at the mainstream of development processes

Some Specific Aspirations of the Sector

From To

Perceived as weak; “sari-sari store” depiction ; no marketing, no brand

The acknowledged leader in economic, social & environmental sustainability;The preferred business model; The fastest growing form of enterprise

Highly indebted members with low savings capacity

Financially literate, entrepreneurial members who live the coop way of life (empowered)

Mission drift/diminished identity Adherent to coop mission and identity

Weak cooperatives Safe and sound cooperatives

Some Specific Aspirations of the Sector

From To

Fragmented Rationalized/unified

Unregulated Self-regulating

Weak databank Real-time, on-line data with alert system

Disconnected; Network not maximized

Interconnected

Funds with commercial banks; No system-level safety nets

Pooled funds (liquidity fund, loan fund, stabilization fund, investment fund)

6 Million members 30% of the market

Part lll: Possible Areas of Partnership (in the context of

the Coop Sector intends to do)

e

What Shall the Coop Sector Do?

1 Capacity building program including reorientation on coop values and principles

2 Continuing advocacy for appropriate regulations

3 Seal of excellence from the regulatory body

4 Research and Development for innovation

5 Pooling of funds and resources

What Shall the Coop Sector Do?

6 Standardization

7 IT for connectivity and payment services

8 Self-regulation

9 Rationalization of territorial boundaries

10 Restructuring of the sector

11 Mergers and consolidation

Coops as Builders of Sustainability: Some Enablers

1 Taking steps toward right, robust data

2 Suggestion to tap areas without BSP access points

3 Recognition of the need to make operations more efficient

4 Stabilization fund (e.g. NATCCO) and deposit insurance (e.g. Coop Deposit Insurance System or CODIS) both anchored on sustainability

5 Four coop federations promoting IT software

6 Excessive/idle cash especially among the large coops

Coops as Builders of Sustainability: Some Disablers

1 Seeming complacency with the perception of having a captive market among coop members

2 Low investment in the development of the KSA of coop employees

3 Slow growth in membership

4 High Portfolio at Risk (PAR)

Protecting Coop Members' Deposits

e

PDIC for Coops: Organized by Coops, for the Coops

In all these, the Coop Sector surely needs & welcomes PICPA as a

Partner!

Thank You All for Listening!!!

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