What a co-operative needs to do to be a co-op

Critics of the Co-operative Group’s governance reform have outlined the problems with proposals, but what changes must the organisation make to stay true to its roots? Co-operative business...

Critics of the Co-operative Group’s governance reform have outlined the problems with proposals, but what changes must the organisation make to stay true to its roots? Co-operative business adviser Jo Bird lists some of the essential features:

  1. To seek and gain consent from the International Co-operative Alliance to use the name co-operative or co-op.
  2. A clear purpose for the benefit of its members, as agreed by members. For example: “The society exists in order to serve its members by carrying on business as a co-operative in accordance with co-operative values and principles.”
  3. Membership is open to all who are regular customers of the society and invest an agreed minimum amount of shares.
  4. Members may exercise their right to invest more than the minimum shares in the society, on a one member, one vote basis – not one share, one vote. Preferably up to the statutory limit of £100,000.
  5. A clear list of decisions that may only be taken by a general meeting or referendum of the wider membership. For example, acquisitions, disposals, loans entered into, additional share offers – all above a certain threshold.
  6. At least 10% of individual members need to vote in society elections or referendum, for the result to be valid. For example, if there are 2.5 million individual members who are regular customers, a quorum would need to be 250,000 members. This isn’t far from 222,222 votes in last year’s Group elections.
  7. A nominations committee needs a majority to be composed of elected members. It would use transparent and non-elitist criteria to assess and endorse competency for the role of director. Any candidate rejected by the committee would have the right of appeal to an elected members body and/or the wider membership, for example through election.
  8. The ICA states: “Co-operatives are democratic organisations controlled by their members.” Therefore a majority of all directors need to be elected by the membership, in contested elections.
  9. Gaps in board skills and experience are filled by competent independent non-executive directors, who must not form the majority of directors. For example, a Board of 11 could have 6 member elected directors, 3 INEDs and 2 executive directors.
  10. The interests of regional societies need to be represented in a way that is acceptable to at least two thirds of regional societies, by trade with the society.
  11. Increased freedom of information with members. For example, members’ right to view a register of director’s interests, and voting record of each director, multiple channels of communication with directors.
  12. Co-op Dividend. The power to distribute part of annual profit as dividend to members, in proportion to purchases from the society.
  13. Common ownership to discourage personal gain from demutualisation. For example, upon winding up, any residual assets should go to another common ownership society in membership of Co-operatives UK.

• Jo Bird is an adviser with Co-operative Business Consultants and co-organiser of this year’s Ways Forward conferences, which brought together activists to discuss the failings at the Co-operative Group. This article is a summary of a full article from the CBC website.

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