Melina Morrison On How Co-operatives, Mutuals & Social Enterprises Create Value Sustainably

Melina Morrison is the CEO of the Business Council of Co-operatives and Mutuals (BCCM) and was a driving force behind the establishment of the Council in 2013.

Melina has since led the association to many historic achievements for the Australian co-operative and mutual sector including; the first national mapping of the mutual sector’s economic impact; the first advocacy blueprint; advocacy to establish a Federal Government inquiry into the co-operative and mutual business sector; and the development a global-first – a framework to measure the unique economic and social value of CMEs.

As a result of Melina’s long-term campaign for CME access to capital, the Federal Government passed the first enabling laws for co-operatives and mutuals in 18 years – the Treasury Laws Amendment (Mutual Reforms) Act 2019 – facilitating the issuing of equity without demutualisation.

Melina discusses the power of co-operatives to generate positive social change, live from the 2022 Social Enterprise World Forum.

Highlights from the interview (listen to the podcast for full details)

[Tom Allen] - To start off, what led to your passion in both social enterprise and co-operatives?

[Melina Morrison] - First of all, I just want to mention your role in getting this World Forum started, along with your other collaborators. There is an amazing buzz here, and I'm delighted to be able to talk to you as well as speak here at this conference.

One thing I'll be talking about is how I started thinking about using business for good, and this was when I started writing about co-operatives. It was literally through the experience of storytelling I realised this incredible opportunity not only to use money for good, but that businesses themselves can contain commercial success, social good and social impact if the structure works. That storytelling really led to an obsession, and I've now been doing this for more than 20 years. I’m still passionate today.

Tell us more about the purpose of the Business Council of Co-operatives and Mutuals and the projects you're involving?

We set this council up because there is a need to shine a light on this overlooked part of the social enterprise sector. There are more than 3 million co-operatives in the world, and about a billion people who are co-operative members.

Co-operatives are a really ubiquitous model that have existed for a couple of centuries. In fact, if you look back at First Nations people, they have always cooperated around the sustainability of their livelihoods.

Melina Morrison and ABC financial journalist Peter Ryan in studio moderating the 2021 BCCM’s Global Mutual Leaders Symposium.

The idea of cooperating together to ensure the success of your own community existed from the beginning of time. We set up the council because this sector is largely overlooked.

Our first role is as a public relations organisation.

Our second goal is that in order to allow co-operatives to grow to their fullest potential, you need to look at what might be holding them back. There's a principle here, which is make it as easy or not more difficult to set up a co-operative if that's your chosen model. It's about parity of treatment.

Thirdly, we needed to encourage more cooperation amongst co-operatives. This is a global principle, there are seven of them and it's the seventh principle. To do that, you have to bring co-operatives together across their traditional industry silos. We're a cross-sectoral council and that's really important. We have ag-cooperatives sitting alongside mutual banks, who are then sitting alongside credit unions, social, housing co-operatives and Indigenous First Nations cultural co-operatives. We also have big health insurers (even superannuation funds that are mutuals and member owned) who are part of this broad church of co-operatives and mutuals.

What is unique about the co-operative model and are co-operatives social enterprises?

The first thing is this shouldn't be a competition. The purpose of your business is really what determines how social it is. Even further, in this day of all businesses talking about their ESG (environmental, social, and governance values as well as stakeholder relationships), we're getting a lot of merging or blurring of the lines. We've really got to go back to the purpose of the business.

Co-operatives have a very clear purpose, and that is that they are set up to distribute value to their members who are also their owners, rather than accumulate capital.

That is typically what a not-for-profit does, it has a purpose to distribute the bulk of its surplus after operating costs (let's say back to social goods). Co-operatives are part of that continuum of businesses that deliver social impact, and I think this gives us a really good opportunity to think about people being able to choose the business model that best suits their particular purpose and journey.

The distinguishing characteristic of a co-operative is co-operative entrepreneurship; you are a community of people that have come together with a shared need and a common cause.

It might be an economic or market injustice you're trying to overcome, but it also might be a shared purpose or vision to build co-operatively, live in co-operative housing or share services. If you are a community of people living with a disability for example, co-operatives can be a great solution, because it gives everyone in the business common ownership. The ownership is democratic, regardless of how much you are using the co-operative. You will always have one vote; one member, one vote is a democratic principle.

Rather than saying, ‘start with the co-operative structure’, start with what the community wants to do together. Then, look at the full suite and continuum of business models.

If equity is a really clear purpose of your business together, (equity is that shared voice and shared choice; the ability to participate in the decision-making around the business equally, the rewards of the business with equity, and to have a shared sense of purpose), those principles and values are aligned with what people are trying to do, and a co-operative is an ideal structure.

Melina Morrison speaking at the 2022 BCCM Resilience Dinner.

Where do opportunities exist to grow the social enterprise or co-operative movement in Australia?

There are so many opportunities, but it's particularly in those areas where current markets or models are being offered to people are very extractive, but people want to move towards a more distributive outcome. We've heard a lot of conversation at the Social Enterprise World Forum, and that idea of a distributive economy is starting to catch on. What a great idea.

How can we actually create models where you allow a distributive purpose or outcome rather than extractive one to occur?

One example are digital businesses. We're looking at platforms set up for the sharing economy, and we're thinking that didn't work out as a shared outcome.

We need to think about models that actually allow the purpose of the digital platform to reward users. We're seeing fantastic inventive ideas in the digital economy space. With renewable energy, we need a just transition in the future. Are people actually going to be able to participate and have the rewards of a greener future, or are we just creating another market for extractive industries to come over the top? Our whole affordable housing issue stems from the fact we have speculative housing at one end and extractive rental housing models at the other. What about a third way, co-operative housing, where the purpose of the housing is to house people affordably, not to speculate on the market? The third area we're looking at is sustainable agriculture. Who are the owners of the business? What's their purpose and intention as more sustainable, regenerative agricultural businesses? Food security is tied to domestic ownership. We need more Australian farm income opportunities as we grow our agriculture or we're going to lead ourselves to quite scary food security issues down the line.

Melina Morrison presenting at the 2022 ICA General Assembly in Seville, Spain.

What advice would you give to other organisations seeking to embed impact in their work?

The most important thing is to measure your impact so you can make sure it's real and not a marketing exercise. Choosing a measurement framework that genuinely works is absolutely critical.

One framework I'd like to invite people to explore is called Mutual Value Measurement. It's a measurement framework for total value creation in co-operatives and other social enterprises that we've developed as a group of co-operatives. We've asked ourselves two questions; how do we create value through our businesses and how do we measure it? Mutual Value Measurement has its own digital presence, mvm.coop is the website, and it explains how six dimensions of mutual value are created in a member-owned business. That's just an example of an impact measurement framework that we know is working with our members and community. What it does is creates longitudinal opportunities to hold yourself accountable to impact. We're going to have to be as careful as listed entities or public companies around greenwashing, social washing and governance washing. It is something we all need to be vigilant against.

What organisations and co-operatives are inspiring you?

Current organisations inspiring me include a brand new digital economy cooperative called the Pack Music Cooperative. Go online and find them; they're an amazing group of musicians who've come together because they want their version (alternative to platforms like Spotify), which put the musicians and the listeners at the centre of the business model. I really want to plug this one, because the Pack Music Cooperative gives you an opportunity if you are a user of music, either an individual listener or perhaps a lovely social enterprise venue, and you want to play Australian First Nations Indigenous music content that's produced. Plus, the rewards of listening to it are going to go back to the musician, because the musicians are members of the platform, so they're not going to be exploited by the Pack Music Cooperative.

Two amazing renewable energy co-operatives are inspiring me. On the retail energy cooperative side, CoPower is a partnership between the trade union movement, co-operative structure and the members of the retail users. We all need to purchase energy after all, unless we're just using candles! If we want a business that's genuinely structured to use its surplus to reinvest in more renewable energy solutions, please switch your business over and energy purchasing to CoPower.

A corollary of that is on the actual green energy side of things, Haystack Solar Gardens Co-operative. If you are a renter living in a Melbourne apartment, you can't put up solar arrays. You can't afford to put a solar system on your roof. But, you can purchase a membership of this co-operative, and that is going to help build a solar garden in regional New South Wales, and you will be directly purchasing the green energy from the infrastructure that you're a co-owner of.

Ben Macnamara, CEO, CBH-Group; Christine Yates, CEO, Retail, Australian Unity; Melina Morrison, CEO, BCCM, Damien Walsh, Managing Director, Bank Australia at The Bunya Fund launch at the BCCM CEO Summit.

Then, I also need to plug the Nundah Co-operative.

The tagline of the Nundah Community Enterprises Co-operative is a role; be a worker in a co-operative with a stake and a fair share. The stake and the fair share bit is what takes the members of Nundah beyond.

Their employment is fabulous, but as co-owners of the business, the people who are employed there, (the people living with disability), and seeking a fair and equitable employment solution for themselves are co-owners of the business. They sit on the board, employ the management, and are cooperatively or collaboratively responsible in a joined up way for the success of the enterprise, and that is empowering. It really speaks to their agency.

Mondragon, the amazing worker co-operative of 83,000 workers started as one business.

The final thing to say about these co-operatives is their scalability. If you are struggling as a social enterprise to scale, open and democratic membership of co-operatives in their structure can really help. An example of this is called SEWA, the Self-Employed Women's Association based in India. It has 12 million members, and it can scale like that because co-operatives keep adding to their business reach as each new member joins. What they've been able to do at that scale is have a bank, micro enterprise funding, a university and a training structure. They have this incredible network of women who are individually self-employed entrepreneurs, who are networked and supporting each other in the growth of their business, but still keeping their individual autonomy and agency.

To finish off, what books or resources would you recommend to our listeners?

Our website is an excellent resource containing case studies and stories. Co-operatives have hidden their ‘light under a bushel’ as the saying goes in the sector. We need to get better at storytelling. By going to our website (bccm.coop), you can actually go to a stories page and find these case studies. We have a podcast and videos. These are the best ways to learn about co-operatives.

There are two books I'd recommend. The wonderful economist Mariana Mazzucatu wrote The Value Of Everything, and it's not specifically about co-operatives. It really talks about why capitalism is a broken model.

What's so inspiring about social enterprise is we create things that have a tangible value. If our economy is based just on trading and the exchanging of value, we're not then creating lasting value.

As Mariana points out in her book, so much of what we regard as wonderful public assets have been often created in collaboration with governments and publicly investing in people's needs.

Institutions like libraries, knowledge centres and universities are not created by the market. There has to be a shared intent around creating valuable products and services.

Finally, a wonderful Professor in the U.S. Nathan Schneider wrote Everything for Everyone: The Radical Tradition That Is Shaping The Next Economy. Nathan's focus is very much on the digital economy, and he talks about how co-operatives can ensure that owners of and users of technology in the next generation need to be rewarded by this economic transition. There is a lot of information about how co-operatives can actually be a modern business model, not just a model based in the past.