This article focuses
on cooperative financing and more precisely on so-called investor shares that
are, in one form or another, permitted in many legal systems. Utilizing a
comparative legal approach, this article seeks to explain what investor shares
are and how they differ from ‘traditional’ cooperative shares, why domestic
policymakers have introduced such instruments and what are the main problems
related to them. The findings of this article suggest that the primary issue
with investor shares is that they render a seemingly inevitable conflict of
interest between their subscribers and cooperative members. First, since
cooperatives are ultimately member-oriented service providers, generating
profits for shareholders compromises the fundamental values and principles of
cooperation. Second, due to the principles of democratic member control and
autonomy, cooperatives are often reluctant to grant governance rights to external
parties. Therefore, investor shares have never been widely utilized in
cooperative financing and to determine if there are ways to overcome issues
related to them, more empirical and doctrinal research is needed.