How Does a Cooperative Work?
To an outsider, a cooperative might look very similar to any other type of corporation, some cooperatives limit who join them. Some cooperatives are open to all, but provide special incentives to members, such as a discount on products or services.
People who join cooperatives or who are among the founding members of a co-op often have the same shared values, meaning they are willing to work together towards a common goal. One of those goals is to create a better world by working together and by shifting the focus of the business to place people over profit to build a more inclusive economy.
Co-op Ownership and Control
The people who benefit from the products or services of a cooperative business own the cooperative business.
Just as the shareholders of a business have a say in the ownership and operations of a company, the member-owners of a co-op have a say in how the cooperative operates. The crucial difference is that in the case of other types of corporations, the size of their ownership stake affects how much of a say or how much control an owner has over the company. A shareholder who owns 50% of a corporation will have more votes or more control over the operation of the company compared to a shareholder who owns 2% of a corporation.
That’s not the case with a co-op. As equity and equality are among the founding principles of a cooperative, each member-owner of a co-op gets one vote. The opinion of one co-op member does not have more weight than the opinion of another co-op member.
Cooperatives often elect a board of directors. The responsibilities of the co-op board include ensuring that the cooperative is working towards achieving its mission, setting up operational policies for the co-op and hiring any outside managers or other employees.
Members of a co-op’s board are members of the cooperative itself. They are typically elected to the board by a member vote. Board officers have additional responsibilities and duties, which members can find in the cooperative’s by-laws.
