A co-operative, or a Co-op, is a legal entity controlled and democratically directed by its members. There are no shareholders with voting rights. So really, a co-op is the halfway stage between a partnership and a corporation.
There are many different kinds of co-ops. Years ago I was a management consultant for a ‘secondary co-operative’. This was a group of twenty businesses that jointly managed, through a management committee, the building in which they were housed.
Let’s have a look at some types of co-op.
A housing cooperative is formed by a group of people who collectively look after the properties they own and want to provide affordable housing. The same can be said about a building cooperative which helps members share resources for the construction of their homes.
A Workers’ Cooperative is owned and democratically controlled by its “worker-owners”. There are no outside, or ‘consumer owners, in a worker’s cooperative – only the workers own shares of the business. Membership is not an obligation for employees, but only employees can become members. There is a good example of worker co-operation in the Basque Country – the Mondragón Cooperative Corporation.
In Italy they have Social Cooperatives that provide food, education and health care to their members.
The common theme in all cooperatives is the absence of financial profit as the principle motivation. Business can be about so much more than money.
The Cooperative Movement was started by a wealthy Welshman called Robert Owen in the 19th Century. His ideas were furthered by Dr William King who suggested that poor people open shops run along cooperative principles.
“We must go to a shop every day to buy food and necessaries,” said King, “Why then should we not go to our own shop?”
Cooperatives have spread all over the world from England to Australia. The International Cooperative Alliance defines the spirit of the cooperative movement as self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, co-operative members embrace honesty, openness, social responsibility and caring for others.
Of course there are many non-cooperative businesses that profess the same principles. Few, however, have them enshrined in their Memorandum and Articles.
A business by the people, of the people, for the people? Is that a good idea?