Measuring the value created by Australia’s Cooperatives and Mutuals

10 November 2017

Monash Business School researchers are partnering with some of country’s best-known cooperative and mutual enterprises (CMEs) to create a consistent way to measure the sector’s total social and economic value.

Monash Business School’s Department of Accounting is partnering with the Business Council of Mutuals and Cooperatives (BCCM) to create an industry framework that individual cooperatives and mutual enterprises (CMEs) will be able to customise for individual use.

Monash Business School Department of Accounting researchers, Dr Paul Thambar and Professor Matthew Hall, will lead a team of five researchers in a two-year field study to develop a Mutual Value Measurement (MVM) Framework^©. The team will include Professor Yuval Millo from Warwick Business School and Dr Sarah Adams, from the Australian National University (ANU) and a Research Fellow.

The researchers will work with CBH, Australian Unity, Bank Australia, Credit Union Australia (CUA), HCF, Capricorn Society, RACQ and RAC WA. The project totals $1.1 million, including a $0.6m contribution from industry partners.

CMEs account for some of Australia’s largest and best-known organisations, with an estimated 2000 CMEs in the sector across a range of industry sectors including agriculture, banking and health insurance. It is estimated that 8 out of 10 Australians are members of a CME.

Dr Thambar said they differ from the investor-owned firms in that they create and optimise both economic and social value.

“Current accounting rules and standards are silent on how best to define and measure the total or mutual value these organisations create, Dr Thambar said.

“While many reporting frameworks have been developed to measure social value, an industry framework for CMEs is not yet available.”

Professor Matthew Hall said: “Measurement of value must consider for whom value is created and the organisational practices involved in creating and delivering that value – we need to carry out social bookkeeping which is not possible as we lack knowledge of how to design these practices.”

BCCM’s chief executive officer, Melina Morrison, said: “Having a robust and consistent framework to measure value created by CMEs and the sector is a strategic challenge for us and a basis for the sector to signal its growing importance to the Australian economy and the wider community.

“We are pleased to be partnering with Monash Business School to carry out this important research study.”

Professor Gary Magee, Deputy Dean, Research at Monash Business School said: “Working with industry and doing research that is relevant and practical is a high priority for the Monash Business School.

“This research partnership is one of the largest industry-funded projects to be carried out by Accounting researchers at our Business School and we are pleased to be working with BCCM and the sector.”