Catturani, Ivana and Trento, Sandro (2010) Profit Versus Non Profit: A Third Way? The Case of the Italian Mutual Cooperative Banks. UNSPECIFIED.
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The traditional distinction between profit and non profit firms does not necessarily apply to some types of cooperative firms, such as the Italian mutual cooperative banks (MCBs). These MCBs present a peculiar governance structure, a combination between a public company governance model and a non-profit one. Similarly to a “not for profit organization”, the ownership of the MCBs is widely diffused among borrowerowners, but dividends are not typically redistributed. Like in “public company bank”, MCBs have a spread ownership and a board of directors. MCBs work in order to maximise social utility rather than profits, as a social entrepreneurship. MCBs represent a kind of third way governance model in the financial sector. The board of directors of a MCB acts as a public-good administrator in deciding on how to invest, with a deep impact on the local community. However, the governance of these banks is affected by structural problems. The mutual and co-operative nature of these banks is challenged by the increase in the number of members-owners and in the heterogeneity of the member-owners group. This study aims at investigating the democratic voting mechanism of the board (one-head one-vote) and its appropriateness given enlargement of the member’s community. The research would tackle the issue of governance structure and incentive to efficient behavior.
|Item Type:||Departmental Technical Report|
|Department or Research center:||Computer and management sciences|
|Subjects:||H Social Sciences > HG Finance|
H Social Sciences > HD Industries. Land use. Labor > HD0062.6 Nonprofit Organizations
|Uncontrolled Keywords:||cooperative firm, mutualism, cooperative banks, corporate governance, italian banking sector|
|Report Number:||DISA Working Paper 2010/03|
|Repository staff approval on:||10 Aug 2010|
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