Assessing Incentive and Monitoring Schemes in the Corporate Governance of Maltese Co-operatives

Peter J. Baldacchino, Chantelle Camilleri, Simon Grima, Frank H. Bezzina
European Research Studies Journal, Volume XX, Issue 3A, 177-195, 2017
DOI: 10.35808/ersj/703


The objectives of this study were to ascertain and assess the major incentive and monitoring schemes currently being applied in Maltese co-operatives as well as those types of schemes that may be applicable. Semi-structured interviews were conducted with ten committees of management members, ten professional managers and seven co-operative consultants.The study reveals a lack of application of both incentive and monitoring schemes in these entities. An over-emphasis on cost effectiveness is resulting not only in the current little application of such schemes, but also in obstacles towards the application of new ones in the future. Furthermore, any application of monitoring schemes in particular is perceived as having negative implications on the level of trust between the monitor and the monitored.Additionally, few incentives are being applied to promote co-operative principles despite the declared management willingness to do so. The study points out that a number of lacunas need to be overcome for the realization of both types of schemes. Co-operative managers need to become more aware of the objectives of their co-operative and also more determined towards promoting the co-operative principles.The paper also concludes that no trust implications need to arise in the implementation of any type of scheme as long these are well designed, explained and implemented. One recommended way towards promoting monitoring schemes is the introduction of an updated Co-operative Societies Act including new obligations on the internal control environment.

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