Human-Capital based Governance Structure, Success Factors and Barriers to Effective Governance: Co-operatives in Malaysia

Abstract

Co-operatives comprise the crucial third engine of growth for the Malaysian economy after the public and private sectors.  This study investigates the human capital based governance structure, success factors and barriers to effective governance of co-operatives in Malaysia. Questionnaires were distributed to the top 100 co-operatives listed in the Malaysian Co-operative Societies Commission website. Analysis of the responses to the questionnaires showed that human capital based co-operatives governance comprise members’ participation, independence of the board, depth of expertise and competencies of directors and other characteristics of the board. This study also identified branding as the most important success factor ahead of competitiveness and proximity.  Malaysia’s economy is projected to continue relying significantly on the performance of co-operatives.  Thus, it is incumbent for greater attention to be given towards an effective governance that results in successful co-operatives.