Governance in Estonian Agricultural Cooperatives: Structures and Processes

Abstract

Little is known about the board structures and processes adopted by agricultural cooperatives, particularly in Eastern European countries. We address this substantial knowledge gap by focusing on Estonian agricultural cooperatives. Using survey results from a sample of 23 Estonian agricultural cooperatives, we identify board structures and processes, measure organizational health, and compare our findings to similar studies in other countries. We find both similarities and differences between sample cooperatives and their counterparts in other countries. Estonian agricultural cooperatives tend to perform better than those without a board. However, more research at the member level is needed in order to draw definite conclusions. Member preference heterogeneity emerges as a potential future threat to organizational health and, thus, demands the attention of cooperative leaders in Estonia. We conclude that there exists considerable room for improvement through the introduction of a more flexible legal framework and the adoption of professional board governance processes, which includes director orientation training, inclusion of additional financial expertise and board evaluation routines.