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Over Half a Million Careful Owners: A 75-year History of PSIS, 1928-2003. By Gordon Boyce. Wellington, N.Z.: Dunmore Publishing, 2005. 326 pp. Illustrations, photographs, tables, figures, appendix, notes, index. Paper, $29.95NZ. ISBN: 0-476-0129-29.
This excellent book tells the story of the Public Service Investment Society (PSIS) over its seventy-five-year history. The PSIS operated on the margins of the financial system in a country, New Zealand, that is at the southern margin of the developed world. The story of this small savings-and-loan society run in accordance with cooperative principles may be of less interest to the readership of this journal than the way in which the interpretation has been constructed. Gordon Boyce has taken the history of PSIS beyond the parish pump by casting it in terms of universally important themes of strategy, structure, and corporate governance.
Boyce makes a compelling argument that businesses based on cooperative principles can satisfy the aspirations of their various stakeholders. However, the management of PSIS initially faced a number of challenges in attempting to do so. These included the tensions involved in increasing the number of members without diluting the homogeneity of the group; in keeping a balance between the democratic control exercised by the members and the need for strong management based on commercial principles; in maintaining a balance between paying out the surplus and building reserves; and in weighing the competing needs of the depositors, who were the older members, against those of the borrowers, who were the younger members. The rapid growth of PSIS after World War II brought each of these issues to the fore.
The origins of PSIS were to be found several decades earlier. Workers employed by the New...