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The cooperative principles

A cooperative 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.

Among them, worker and social cooperatives are owned and controlled by the enterprise staff. Other types of enterprises, such as the Spanish “sociedad laborales” (workers companies) share the same characteristics.

Workers’ cooperatives: Workers’ cooperatives are enterprises subject to the same restrictions of competition, management and profitability as other companies. Their originality lies in the fact that their workers hold the majority of the shares, at least 51%. In doing so, the workers decide jointly on the major guidelines of their enterprises and appoint their leaders (managers, boards of directors, etc.). They also decide on how to share the profit with a twofold aim: to give the preference to the workers of the enterprises, in the form of refunds based on the work done and to consolidate the enterprises with a view to handing it over onto the future generations, i.e. creating reserves to reinforce the equity and ensuring thereby the sustainability of their enterprises. In all cooperatives, the internal democratic control is based on the principle of “one man, one vote” whatever the capital share held by the respective workers. Finally, the cooperative spirit promotes its employees information and training, a prerequisite to develop the autonomy, the motivation and responsibility, accountability required in an economic world which has become insecure.

Social cooperatives: Social cooperatives are specialised in the provision of social services or reintegration of disadvantaged and marginalised workers (disabled, long-term unemployed, former detainees, addicts, etc.). A large number of such cooperatives have been set up in Italy but also in other EU countries. Most of them are owned by their workers while offering the possibility or providing for the obligation (according to the national laws) to involve other types of members (users, voluntary workers, etc.).

Other types of enterprises owned by their workers: There are other types of enterprises owned by their workers such as for example the “Sociedades Laborales” in Spain which are real driving forces of economic and social activities which have contributed to lower the unemployment level and to revamp a sustained growth in Spain.

Values

Cooperatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, cooperative members believe in the ethical values of honesty, openness, social responsibility and caring for others.

Principles

The cooperative principles are guidelines by which cooperatives put their values into practice.

1st Principle: Voluntary and Open Membership

Cooperatives 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.

2nd Principle: Democratic Member Control

Cooperatives 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 the membership. In primary cooperatives members have equal voting rights (one member, one vote) and cooperatives at other levels are also organised in a democratic manner.

3rd Principle: Member Economic Participation

Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.

4th Principle: Autonomy and Independence

Cooperatives are autonomous, self-help organisations controlled by their members. If they enter to 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 cooperative autonomy.

5th Principle: Education, Training and Information

Cooperatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their cooperatives. They inform the general public - particularly young people and opinion leaders - about the nature and benefits of cooperation.

6th Principle: Cooperation among Cooperatives

Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.

7th Principle: Concern for Community

Cooperatives work for the sustainable development of their communities through policies approved by their members.