Cooperatives: The governance of patronage dividends (A corporate finance viewpoint)

Members of cooperatives are patrons and owners simultaneously, which turns out to be a consequential feature ingrained in that sort of business associations. This paper puts forward some contributions to the subject. Firstly, it defines a primary cooperative, making hence a contrast with cooperatives of cooperatives and shaping up their distinctive incremental cash-flow structure. Secondly, it focuses on some governance attributes depicted by patronage dividends in their quest for cash flows from assets. Lastly, it points out that the pursuit of growth poses a threat to primary cooperatives, entailing both governance risks and costs whenever these organizations increase in size and scope.