The Business Council of Co-operatives and Mutuals today released Leading the Resilience, a new report on the competitive advantage of member-owned firms in times of crisis. This research provides insight into how co-operative and mutual enterprises (CMEs) in Australia have responded to the turbulence caused by COVID-19, providing evidence of their outperformance when it comes to business survival among other key findings.
BCCM CEO, Melina Morrison said that this report shows the contribution co-operatives and mutuals make to the economy and their communities is a stabilising factor in times of crisis.
“Leading the Resilience is a fascinating look at the experiences of co-operatives and mutuals through the challenges of COVID-19, informed by interviews with CEOs of leading firms across the CME sector,” Morrison said.
“CMEs combine the strengths of small businesses and individuals focused on shared issues with the reach of much larger businesses to deliver coordinated responses to local and global challenges. With a focus on sustainability and the long term, 2020 has demonstrated why CMEs are the resilient backbone of the Australian economy.
In response to COVID-19, co-operatives and mutuals have:
- bailed in, rather than being bailed out, investing from their balance sheet to aid the recovery;
- been job keepers, moving strategically from the outset to retain employees through redeployment, rather than implementing mass lay-offs;
- implemented mental health strategies for members, customers and their staff.
“Remaining focused on an authentic business purpose can demonstrably lead to increased longevity for businesses. It provides for a more positive, secure and stable experience for staff and members alike. Furthermore, it de-risks the broader economy through the activities of a business sector less exposed to the volatility of share markets than listed firms.”
The report finds that CMEs are a 25 per cent longer lived than their ASX listed counterparts.
Morrison said that in 2020 co-operatives and mutuals continued to demonstrate the resilience of their business model and the benefits it provides to members and the broader Australian community, even during periods of economic challenge.
“If social resilience is the capability of a community to withstand and recover from a disaster, it is only natural that CMEs are a fundamental part of our recovery, since they are truly embedded in and owned by the communities that they serve.
In his interview for the report, David Carter, CEO of RACQ, said, “I think that in tough times we really have a collective obligation to think about the right balance between, for want of a better word in business, making money, which is economically the rational solution, and the good of society as a whole.”
“David’s perspective is typical of conversations I have had with our member organisations throughout this period. The question of how they are and could be delivering long term benefits to the greatest number of people, while also ensuring financial stability and success reflects the true difference between CMEs and shareholder owned businesses,” Morrison said.