This is a CTP of initiative: FEBEA/Banca Popolare Etica (Italy)
This critical turning point refers to an important period in the history of Banca Popolare Etica, which coincides with the expansion of the initiative in the first half of the 2000s Due to the increasing number of employees working in the BPE's headquarters, the cooperative designed and implemented a new internal organizational structure in order to improve the control over the activities and the different structures of the bank. Banca Popolare Etica implemented an strategic and operational decentralization, re-organizing its internal structure in four regional areas - Northeast, Northwest, Centre and South.
Banca Popolare Etica began its activity in 1999 in Italy and, during its first 7 years, the bank suffers a very important change regarding the number of people working for the entity. We have moved from an entity where we were, more or less, 10 employees in 1999, to one where we are around 265 workers (...) We were looking for a new formula to remain balanced. In 2004, 2005, 2006, the number of hired personnel grew sharply , so that at some point, we lost certain control over what was happening within the organization..Then, we adopted a structure that works with different departments, each department has its own objectives and it is not so easy that a person who works in Sicily knows exactly what we are doing at the headquarters in Padua
Simultaneously, the cooperative enters in a lively internal debate around the bests forms to improve its internal democratic decision-making processes. The outcome of such fruitful discussions paved the way for an enhanced associative and participatory model. The last step of this organizational process happened during the celebration of the Members' Assembly of Banca Popolare Etica, in November 1997, in which BPE partners signed the new “Associative Agreement between the bank and the regional groups of members”. The respondent also comments that the cooperative is currently living another process of adaptation to a new situation given to the incorporation of the Spanish initiative Fiare (Spain) as a new Area within the structure of Banca Etica.
This is stronger (the adaptation process) with the activity that we are currently developing in the Spanish territory through the Bilbao’s office. We are currently working in two countries with a level of complexity not comparable to how things were at first stage of the bank
The first actor related to the co-production of this CTP is the credit cooperative Banca Popolare Etica and its leaders that, during the first stage of the initiative, run the cooperative. It should be mentioned that Banca Popolare Etica was the first Italian ethical finance institution, rooted in the social an solidarity economy sector. BPE was founded in 1999 by social entities who aimed to create a financial institution were savers, driven by the shared ambition to become a living example of a more transparent and responsible management of financial resources model, could meet and fund socio-economic initiatives actively pursuing sustainable social and human development.
This critical turning point occurs within the first stage of Banca Popolare Etica. After the authorization granted by the Italian Central Bank to start operating as a bank (December 1998), the 8th of March 1999, the credit cooperative began its financial activity in the North of Italy, opening its first branch office in the city of Padova. Although the cooperative started with a reduced number of employees, the cooperative opened in few years new branches in the nearest cities of Brescia, Treviso, Vicenza and Firence. Banca Popolare Etica expands its activity to the south of Italy hereafter, opening offices in cities like Napoli or Bologna. As the respondent explains in the following quotation, BPE took advantage of being the only ethical institution in Italy, fulfilling the interest of many third sector organizations to work with a value-oriented bank and bein able to provide financial services to this sector.
In those years the bank started to assume more work and to hire many people. Besides, there was a growing demand of new services, more people willing to work with an ethical bank. We started hiring people, we have changed our structure with many more people working for us. When we surpassed 80 workers, everything began to be more complex
The increasing demand of services compels BPE to open new branches in other Italian cities and to hire more personnel. Moreover, this situation forced the leaders of the initiative to establish a more professional and structured internal organization. Such reorganization was also demanded by the national banking regulations, which forced the initiative to formalize its internal bodies and the specify the responsibility of each of them, as the following explains:
The cooperative demands a more formal structure and so does the Bank of Italy, which wants us to have a clear structure regarding the responsibilities of the structure. It was necessary to distribute responsibilities. Consequently, we have set up a hierarchical structure that over the years has given us much more strength (...) There has been a fundamental change in BPE. We have set up a structure with many intermediary bodies, with an Forum Area to collect the demands of each territory and meet the demands that come to the bank, so that they can be transformed into future projects. So it has been a fairly strong change in ethical banking
Two events have been mentioned in relation with this critical turning point. The first was the origin of Banca Popolare Etica. The bank´s roots are found in third-sector organisations, volunteering entities and others devoted to international cooperation. It also existed in Italy a prior experience of ethically oriented finance which was initiated by the MAG cooperative societies. Such mutual self-management associations raised savings among their members to finance socially oriented projects. However, forced by the Bank of Italy, MAGs' leaders promoted a fundraising campaign in order to obtain a banking license to operate as a credit cooperative. They obtained this authorization in December 1998, and, the 8th of March 1999, Banca Popolare Etica opened its offices in the city of Padova.
As it was explained above, the initiative counted on the previous MAGs' experience and its functioning was very close to the one followed by many entities at its social basis. BPE granted credit to the third sector movement, mostly local and regional organizations and social investment projects. The main financial activity was conducted through the office, based on face-to-face relations with savers and customers. Later, the increasing demand of new services and products- like online banking- required more trained personnel and new offices in the main Italian cities. Currently, Banca Popolare Etica has 16 branch offices, with over 200 workers and a wide-spread network of financial promoters called "banchieri ambulanti" (street bankers).
At the beginning we did not have any debit cards, we had no checking accounts. It was a bank where we had very clear ideas but we had few banking tools. Today, we are working with thousands of entities and people in two countries. We work with many people in different countries and our employees are very committed. There's no doubt that things are very different nowadays
The processes of internal organization and change within the initiative have been discussed and approved in several general meetings:
Decisions have been taken in different assemblies. But it is not a change from one day to the next. Changes in our structure have been developed over different years. In each meeting we established a structure with new rules. For example, we have established an associative pact between the bank and the people at the local level. Now, for example, within the commercial area we have all the local offices, the street bankers and more than 250 working for the cooperative. .
The interviewee mentions a later event also related with this Critical Turning Point. After some years of collaboration between both initiatives, Banca Etica reached in 2014 an agreement with the Spanish financial initiative “Fiare”. Both initiatives decided to merge into one in order to build a cooperative ethical banking entity at European level. The new entity was called “Banca Etica” (also known as “Fiare Banca Etica” in Spain). This merge also involved a new structuring process. A new area was added to the former four and more associates and co-workers joined the cooperative. This situation has involved further changes in the board of directors and in daily practices for both initiatives. As example, during the 2015 General Asembly, Banca Etica approved important modifications of the Statutes in order to adapt the cooperative to the new situation. BPE changed the formula for electing the members of the Board of Directors. Second, a a new territorial organization was approved, of the associates, aiming to enhance the participation of the new partners in the daily life of the cooperative, which involved the creation of online voting systems.
The turning point can be described as a consequence of the foreseen internal issues if some important changes were not adopted. According to the interviewee, some associates manifested then their concern on how the bank was operating at that time. Some people were afraid of having lost control, since they will not have a direct partner anymore and they were not clear at that moment on whether there will be suitable bodies for them to participate. Besides, the same applies with the banking staff, which didn't have a not clear overview of the entire organization. The CTP triggered an internal debate on the type of structure the cooperative needed and created new intermediary bodies which enhanced the involvement of partners.
The respondent remarks the idea that changes have not been radical or forced by any actor within the organization. On the contrary, such processes took up a fair amount of time to forge a consensus among the partners and strengthen their participation in the decision-making process.
Besides, after 15 years, some changes were introduced within the structure of Banca Popolare Etica in order to adapt the internal bodies to the new situations they had to face. The creation of new hierarchical structures was perceived by some members as a way to make the organization more rigid. This change meant in turn that a clearer idea existed on who to address questions or which ones was is the suitable body to make requests, proposals or suggestions to.
I think that the people who launched Banca Popolare Etica had a deeper political role within the initiative. Now, we have 38.000 associates in two countries. We have to deal with many differences, and the partners still have a strategic role but that they cannot pretend that changes to occur in the short term. When we started, any group of partners had the possibility to say “let's do this” and the bank could decide to follow their idea. Now we are a little less flexible, of course. We have less flexibility than when we had less employees, and contacting daily with all partners is no longer possible. Tensions between both demands are normal and we cannot avoid it
The interviewee considers that a wider consensus within the members of the initiative exists regarding the perception of the described process as a critical turning point in the history of the organization. After a decade, the positive outcomes of it have been observed by most associates, who count on a clearer structure that facilitates their involvement as well as it ensures the accountability in the performance and results of the banking activity.
Thanks to this new partnership pact and the intermediate structures created, the partners have begun to understand the positive outcomes of the change . They also understood that change did not mean losing control but thinking of acting as an ethical bank, in a different way than how it was in the early years..
One of the lessons that the respondent draws from this critical turning point is that hierarchical structures usually spark rejection, when changes are not properly introduced. If such organizational changes are adopted without the approval of the majority of the initiative, they could provoke many resistances or, even, an internal crisis that can jeopardize the project:
Co-workers and associates want to know what is going on in their initiative every day… We have to understand that it is perfectly legitimate that they prefer to maintain things as they used to be in the beginning.
In fact, the maintenance -or creation- of new internal structures are highly related to the need of control any partner aims to have over the organization he or she belongs. In order to maintain the motivation of people, promoters should gain the acceptance of the entire organization (or at least of the majority of members) as well as to invest enough time as to ensure a quality debate. As the CTP demonstrates, this structural change required almost two years, but provided the basis for the following reorganizations.
This turning point has truly involved a fundamental change for Banca Popolare Etica. We have set up a structure with many intermediate bodies. For example, we have created a Forum to collect the demands of each territory and for being able to turn these demands into new projects. This did not exist before.
In the recent years, Banca Popolare Etica has been progressively promoting the decentralisation of the cooperative, in order to strengthen the links between the banking institution, the public across the territory and the local shareholder groups. The initiative aims to increase the active involvement of partners in the bank's life. New bodies have been created to facilitate shareholders to participate in the social and cultural activity of the and in the decision making processes “by stimulating the circulation of ideas, proposals, debates and dialogue”.
In special, Banca PopolareEtica seeks to create:
“A stronger bond between individual members and the bank, thus promoting the idea that human relations are one of the most important values we hold”.
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