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Two shops, two stakeholders
Swindon Pulse Wholefoods – a workers co-op in which customers have no voice.
Coniston Co-operative Society – a consumer co-op in which workers have no voice.
Both work well, but shouldn't it be possible to have a co-operative business in which all key stakeholders have a voice?
Some solutions...
Community co-ops include everyone – but consumers tend to outnumber workers at general meetings, while workers might find it easier to participate on the committee.
Secondary co-ops can operate a partnership between a consumer co-op and a workers co-op; but this is unwieldy.
'Golden shares' and reserved places on the board can be used, but they don't provide for participation throughout the governance of the co-op.
Different classes
Our solution is to create different 'classes' of share for each stakeholder group. These groups then control the co-operative at its general meeting in fixed proportions.
This is useful for a number of different types of co-operative:
- Community supported agriculture
- Community land trusts
- Employment creation projects
- Vertical integration
Co-operative capital
Another stakeholder group that might be relevant is investors. In other European countries, workers co-operatives in particular have grown by raising share capital from investors.
They need enough of a say in the co-operative to protect their investment – but not so much that they can control its activities.
Non-user members
In 2007, the FSA ruled that – for reasons of consistency across Europe – non-user members (such as investors) would be allowed to join co-operatives provided that their powers were limited.
A multistakeholder co-operative can create a class of membership for non-users. This class can have 25% of the voting strength in general meetings: enough to block rules changes, but not enough to set the strategic direction.
Voting at general meetings
2
10
5
2
+
3.9
+
3
=8.9 out of 22
Consumers
Workers
Investors
100%
39%(5.5/14)
61%(5.5/9)
The board of directors
There are a number of different methods that could legitimately be adopted: candidates could stand in one constituency only, and each constituency elects a fixed number of Directors or each class could prioritise a single list of candidates, or candidates could be voted on in turn.
However, there must be a resolution to appoint the board that is approved by the whole meeting.
Are they consistent with co-operative principles?
Principle 1: open membership
Principle 2: one member, one vote
This remains true within each class; you can think of a multistakeholder co-operative as being like a secondary co-operative, where voting is fair but not necessarily equal.
Principle 4: autonomy and independence
It is generally recognised that provided that non-user members are limited to 25% of votes and cannot vote for demutualisation, this is upheld.
The Somerset Rules IPS Co-operative Multiple classes and non-user members Organised around the co-operative principles – including 4, 5, 6 and 7 which are often neglected Commonwealth Council Mission led Social accounting 'Key decisions'