A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.
Co-operatives use a variety of legal forms (companies, societies, partnerships and trusts) which are operated and managed according to a set of principles laid down by a group of people who set up the first Co-operative Society in Rochdale in the 1840's:
The Rochdale Pioneers.
The co-operative values and principles identified by the Rochdale Pioneers to this day guide and define co-operative enterprises around the world. They were formally adopted by the 1995 Centenary Congress of the International Co-operative Alliance (ICA).
1. Voluntary and Open Membership
Co-operatives are voluntary organisations open to all persons able to use their services and willing to accept the responsibilities of membership without gender, social, racial, political or religious discrimination.
2. Democratic Member Control
Co-operatives are democratic organisations controlled by their members who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to their members. In primary co-operatives members have equal voting rights (one member one vote) and co-operatives at other levels are also organised in a democratic manner.
3. Member Economic Participation
Members contribute equitably to, and control democratically, the capital of their co-operative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any of the following purposes: developing their co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion with their transactions with the co-operative; and supporting other activities as approved by membership.
4. Autonomy and Independence
Co-operatives are autonomous, self help organisations controlled by their members. If they enter into agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy.
5. Education, Training and Information
Co-operatives provide education and training for their members, elected representatives, and employees so that they can contribute effectively to the development of their co-operatives. They inform the general public – particularly young people and opinion leaders – about the nature and benefits of co-operation.
6. Co-operation among Co-operators
Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.
7. Concern for the Community
Co-operatives work for the sustainable development of their communities through policies approved by their members.
The important thing to understand about the principles is that they are not simply a menu of ethics that you can pick and choose from, rather they work together like an engine to drive a sustainable democratic enterprise. If any parts of the 'engine' are missing then the enterprise is more likely to fail as a co-operative or to damage the reputation of co-operatives.
For further information please see Co-operatives UK's website.
