Consumer co-operatives in Korea have been growing rapidly since they launched their own shops. If co-operatives would be too much oriented to enlargement or economic growth, they might easily pay no attention to members’ participation which is one of the priorities in co-operatives. It could lead to losing the value of co-operatives. So it is important to adjust the balance between members’ participation and economic growth. This paper focuses on the role of board of directors in doing that. It aims to examine how effectiveness of the board influences members’ participation and the participation has effect on performance of co-operatives in the case of iCOOP Korea. The variables such as communication with members and usage of management skills and knowledge are employed as measures of the effectiveness of the board in decision-making process. The data are collected by survey the respondents of which are 222 directors of 30 primary co-operatives. It is analyzed by Structural Equation Model. The findings of the research are as follows. Firstly, communication of the board with members increases the members’ democratic participation, and the increased participation contributes to improving the financial performance. Secondly, management skills and knowledge of the board does not have significant relations with the level of members’ participation, even though members’ economic participation has significantly positive relation with the financial performance. The findings imply that members’ voluntary participation will be increased when boards of co-operatives try to reflect members’ needs in the decision making processes, and it can help the co-operatives improve their financial performance. It suggests a clue for the trade-off between the value of co-operatives and growth of business which many co-operatives are trying to resolve.
As the Framework Act on Cooperatives came into effect and the central and local governments have supported people who want to build their own cooperative, many cooperatives were established. Cooperatives, as a democratic association as well as an enterprise, have the responsibility for managing the democratic governance system and attaining the financial performance. This study focuses on the democratic governance system, and examines the literature on the role of board of directors and its effectiveness. Boards of directors are expected to supervise and control management or to be a strategic partner with management according to the perspectives of the governance theories. But in recent years, some researchers propose that researchers and practitioners would rather integrate plural perspectives to get an effectiveness of board structure and its role. This proposition has implications that it could be important for newborn cooperatives to establish their own governance system considering their goal, the characteristics of members needs, and decision making culture, etc.
Consumer co-operatives in Korea have been growing steadily due to changing lifestyle and increasing food safety concerns. The growth has brought consumer co-operatives new challenges such as more professional management and participation from members. In general, primary consumer co-operatives in Korea have been managed not by professional managers but by elected directors, who are responsible for responding to the new challenges faced by co-operatives. This study aims to analyze the characteristics of boards, specifically in iCOOP Korea. The sample consists of 44 primary co-operatives and 328 directors of those co-operatives. The characteristics of the boards are analyzed and their implications are discussed in this research. One of noticeable findings is that the boards of primary co-operatives in iCOOP Korea are dominantly led by female directors who are housewives with college degrees. The results of this research suggest that consumer co-operatives must enhance directors` managerial capabilities given that democratic control is a norm for most co-operatives.