Executive Summary
This paper sheds light on the benefits cooperative banks provide to their members and society as a whole. The stock-taking is based on a survey among 16 cooperative banking groups. To avoid subjectivity and self-congratulation, cooperative banks had to be able to prove or report on their stated benefits in public communications, e.g., in annual reports or on websites. Besides, the reported benefits had to be significant and offered by the majority of local and/or regional cooperative banks.
The survey finds that all cooperative banking groups publicly communicate about their cooperative governance, activities, and performance. The intensity and detail of information disclosure on these three topics vary between the groups. The documented benefits can be divided into four main categories: (i) direct member benefits, (ii) indirect member benefits, (iii) collective benefits for members’ community, and (iv) benefits for society at large from the group’s perspective.
With regard to direct member benefits, there are large differences between banks. Some banks offer – one to five different – financial benefits to members, while others give no individual financial member benefits at all. This variation is partly caused by differences in national – cooperative – legislation. In contrast, all groups grant non-financial direct member benefits, e.g., products and services, admittance to sponsored activities, access to knowledge and information networks for members only.
All groups also showcase indirect member benefits. The latter pertain to formal roles for members in governance bodies, deciding on the allocation of cooperative funds, et cetera.
Cooperative banks maintain they do not only grant (in)direct member privileges, but aspire to contribute to the development of members’ living environment. This may sound a bit pompous but is substantiated by real examples such as fulfilling a social network function for small businesses, sponsoring of local sport and cultural activities, and consulting and collaborating with local governments and/or organisations. The latter activities and initiatives basically come down to strengthening social cohesion.
Finally, all banks express their ambition to contribute to addressing (inter)national issues with a large impact on society. The examples presented under this heading are diverse: from being seen as initiator or frontrunner in public debates on social or environmental issues to offering support to new or existing cooperatives (in developing countries) or providing significant aid in case of national emergency situations.