What are the co-operative characteristics?

Last Updated on Saturday, 01 May 2010 22:48 Written by David Griffiths Thursday, 29 April 2010 02:09

The co-operative values and principles create specific challenges for co-operative governance. Co-operatives throughout Australia share these characteristics:

• Formed by a group of people who have a common need and form a co-operative to help each other.

• The members own the co-operative. The co-operative exists to serve and be used by its members.

• Each member has only one vote irrespective of their use of the co-operative.

• The member owners elect the board and charge it with the responsibility of operating the co-operative on their behalf. The board is accountable to the members.

• The board is elected by the members at a general meeting of the co-operative.
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• Members may choose to raise capital from external sources but without compromising democratic control.
• The capital of the co-operative is contributed in whole or part and is the common property of the members.

These characteristics underpin and inform the principles and practice of co-operative governance. Democratic control is integral to co-operative governance. Crucial to co-operative democracy is that any member can stand for and be elected to the board. There is a risk, however, that the need for qualifications and experience could be sacrificed and the co-operative becomes management-driven. The answer to this dilemma is to co-exist democracy and the necessary qualifications and experiences.

A co-operative should promote and practice co-operative values and principles. In practice, therefore, a co-operative should actively:

• provide and promote co-operative education to members, managers and employees.

• co-operate with other co-operatives at local, state and national levels.

• promote equity and non-discrimination in relation to age, race, nationality, sex, religion and politics.

• promote and facilitate member retention and growth.

• promote and facilitate member ownership and control.

Directors of a co-operative are not neutral. They have a business relationship with and personal goals for the co-operative and it is necessary to:

• Clearly define the role of the board and directors.

• Strive to attract directors with appropriate qualifications and expertise.

• Define required and desired director competencies.

• Provide ongoing training and development for directors and members.

Except for very small co-operatives, the members are not expected or desire to participate in all decisions of the co-operative. In electing a board, the members confer on the board the authority to make decisions. The board is, however, accountable to the members about:

• what decisions have been made

• why the decisions have been made

• what co-operative resources have been used

• what results have been achieved and why

All members should have equal and timely access to information concerning the co-operative including:

• The financial situation

• Performance

• Ownership

• Governance

Information provided by the co-operative to members and other relevant parties should be:

• Factual

• Timely

• Clear and objective

The annual report to members should include:

• A coherent explanation of the co-operative's performance and prospects.

• An explanation of successes and setbacks.

• The report should also be clearly written so that it is easily understood by members.

• Include all material information

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• ?Transparency about director fees and reimbursements.

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