Member activism, governance, and performance in Cooperatives

Abstract

The demise of prominent cooperatives around the world raises questions about the viability of cooperative governance. One important aspect rarely discussed in the field of cooperative governance is the role of member activism. This study investigates whether member activism can influence cooperative performance through good cooperative governance as a mechanism. Using a newly developed member activism measure derived from mutual incentive theory and the dynamic capability theory, along with a cooperative performance measure that incorporates both financial and non-financial aspects, the results suggest that member activism enhances the governance and performance of cooperatives. The study also finds that member activism is a factor that can improve governance, subsequently leading to better cooperative performance. The impact of this study is relevant to regulatory bodies such as the Cooperative Commission of Malaysia, as well as to cooperatives’ boards and management, highlighting the importance of improving member activism to ensure better accountability to stakeholders.