With the approach of the Orientation Congress of the Mouvement Desjardins, which will take place on October 15 but of which the public and most of the members know nothing, the Institute for Research in Contemporary Economics (IREC) published a report last month for review its development. Its objective is to give members — that is, the majority of the Quebec population — the tools necessary for a renewed reflection on the orientations taken by the Mouvement as well as on the withering of its democratic and cooperative culture. At least four major transformations should be debated at the next Congress and beyond.
First, the disappearance of regional federations led to a standardization and centralization of decisions. It diluted the originality of the Movement, hitherto in tune with the most common practices among financial cooperatives, to align it instead with the typical two-tier organization of banks or credit unions (head office and local branches). The subsequent creation of the regional “Tables de concertation” did not compensate for this shift, since they remain advisory instruments, with no formal link with the decision-making bodies and with no real or systematic influence on the Federation’s choices.
Secondly, combining the functions of President and Chief Executive Officer added to the feeling of distance and imposed the perception of a Board of Directors (Board of Directors) disconnected from the deliberative processes that must exist between the administrators of the caisses and the Federation . Desjardins is one of the only financial cooperatives in the world to merge these two functions.
Furthermore, the addition of “co-opted” external members to form a third of the board confirmed this shift towards governance practices specific to the corporate world, especially since few of them are recruited from the cooperative sector. Here again, Desjardins stands out from the majority of large financial cooperatives; does not include non-elected external directors.
Third, while the Autorité des marchés financiers only imposes a minimum capital ratio of 11.5% on Desjardins Group, this ratio has long since been greatly exceeded. Desjardins is ahead, in this regard, not only of most of the major European financial cooperatives, but also of the major North American banks.
Desjardins prides itself on being one of the best managed financial institutions in the world, but the other side of the coin is that it is also one of the cooperatives whose ratio of loans to assets has decreased the most. Since twenty years. The relative decline of non-mortgage loans (personal and business) at Desjardins has also led to a decline in its market share to the benefit of the banks, and therefore a loss of influence on the economic development of Quebec.
Finally, how can we overlook the withering of this support for communities and the most disadvantaged in a context of territorial devitalization and the explosion of loan sharking (especially online) across Quebec? Yes, the “Grand Mouvement Fund” was created to reduce the impact of the deterritorialisation of services, but it remains essentially registered in the register of patronage. Yes, the “Desjardins Mutual Aid Funds” support the most vulnerable Quebecers, but they only lend them on average just over $300,000 annually out of assets of $400 billion, more than ten times less than the salary. of the President and Chief Executive Officer of Desjardins Group…
Proposals
Desjardins is a collective heritage and one of the most powerful tools that Quebec has acquired. Its future is too important to be dealt with in a vacuum. Faced with its structural excesses, we therefore submit the following proposals for debate:
1. A separation of the functions of Chairman of the Board based on the maintenance and promotion of the mission as developed by democratic authorities, then of Chief Executive Officer, in the service of this mission and its adequacy with the principles of healthy cooperative management.
2. Recruitment of all external directors exclusively from the cooperative universe, coupled with official sanction from the appropriate democratic bodies for each of them.
3. The adoption by vote of a policy limiting the highest remuneration of the Mouvement to 20 times the average Quebec salary.
4. The transformation of regional issue tables into true decision-making bodies.
5. A revitalization of credit programs for businesses (particularly cooperatives and the social economy) and for individuals based on a rebalancing between the weighting of risks and the imperative of supporting members.
6. Finally, the launch of a vast financial empowerment operation aimed at freeing tens of thousands of Quebecers from the clutches of loan sharks by establishing new microcredit programs and/or mobilizing a small portion of the refunds.