3.1.3.1 Cooperatives with a social purpose (VSO label) in the renewable energy, financial and housing sector

In Europe, special types of cooperatives with new organisational and operational aspects have emerged, i.e. social cooperatives, WISE,1 and multi-stakeholder cooperatives.2 Cooperatives by definition are organisations which are owned by their members rather than by investors.3 They are characterised by democratic ownership and (equal) representation in the decision-making processes. Cooperatives also tend to involve a variety of stakeholders in decision-making by assigning ownership and membership rights to stakeholders.4 The governance of cooperatives involves different types of stakeholders, such as producers, consumers, investors, etc. In contrast, the various interests of the different groups of stakeholders in traditional commercial for-profit companies will not always be taken into account in the decision-making processes by the governing bodies. For example, decisions can favour particular members/shareholders over other stakeholders. In cooperatives, equality, democratic governance and the involvement or participation of stakeholders in decision-making converge the interests of stakeholders towards the achievement of a common mission. Huybrechts and Mertens elaborate on pragmatic legitimacy that cooperatives enjoy from stakeholders when they offer them options for ownership and membership.5 Additionally, they address normative legitimacy that cooperatives enjoy as an alternative organisational form, which differs substantially from for-profit organisational entities. Campi et al., examined stakeholder participation of various categories of stakeholders in WISE and other social enterprises in Belgium.6 Their study indicates that the dominant type of stakeholders, which participates in decision-making, is employees (24%). However, the study concludes that: (i) none of the different categories of stakeholders has an overwhelming influence at boards of directors; and that (ii) the participation and the existence of stakeholders is not only reflected on the board level but it means actual sharing of voting power.7

According to the Belgian legislation, cooperatives and other business organisations, i.e. public and/or private limited liability companies can adopt the VSO label. A cooperative can become ‘a cooperative with a social purpose’ by reforming its AoA to include all the cumulative requirements that have been introduced in Article 661 of the Belgian Companies Code of 1999. Spear and subsequently Coates and Van Opstal, stress that the majority of VSOs in Belgium have the legal form of a cooperative.8 However, the introduction of the VSO legal requirements into the cooperatives’ AoA will not suffice. The legal requirements need to be implemented in practice too. Belgian legislation contains sanction mechanisms in Article 667 applicable to VSO social enterprises that do not implement the legal requirements. The lack of implementation can ultimately lead to the termination of the VSO-status by court decision. Members/shareholders, interested third parties and the public prosecutor can assert a legal claim that an organisation declares itself as a VSO, while not having its AoA in line with the VSO legal requirements. They can also claim that although a VSO meets the legal requirements in its AoA, it does not act in practice accordingly. In both cases, the court has the competence to judge whether a termination of the VSO-status is reasonable in relation to a particular breach. In the following part, we will examine how the three social enterprises of our case studies have implemented the VSO legal requirements in practice. We will start with introducing the cooperatives which are the subjects of the three case studies.