- LEGAL REQUIREMENTS
- ONCE YOU'VE SEEN ONE COOPERATIVE...
- BOARD - Y/N?
- GENERAL ASSEMBLY
- COMMON COMPLAINTS
In order to get an understanding of how youth view “Structure and Participation” in their cooperatives, each person interviewed was asked how they conceive of “operations” and “governance” systems within their cooperatives. Some respondents were familiar with these system names and their distinctions, and others not. A brief description was provided for all interviewees - governance referring largely to organizational decision-making over a longer time period, with operations speaking to day-to-day decisions and activities required to make the cooperative function each day. Do they consider operations and governance to be distinct? Are they systems that are managed at exclusively different times and/or by different people? Or, is there some overlap?
For those cooperatives that choose to legally incorporate, most legislative jurisdictions require that the organization have certain roles and structures in place, particularly with regard to governance elements of a cooperative’s function. To this end, a Board of Directors is typically required, as are specific officer positions on the Board (e.g. treasurer, secretary, chair/president). Some cooperatives have found this to suit their needs effectively. However, Boards of Directors are not inherent to cooperativism or the Cooperative Identity, though they have come to be almost assumedly so given their requirement by law in many places and their resulting ubiquitousness. “Legal requirements and corporate structure may also distort the true nature of a cooperative, which is essentially much closer to an association than a cooperative” (AF Laidlaw, 1980, 33).
Some cooperatives, those that perceive such legal requirements as either deleterious to the integrity of their cooperative or simply not a good fit, will author their governing documents (e.g. bylaws), so as to essentially create a work-around for the legal requirements. For example, the Board and any requisite officers will exist on paper, but written into the governing documents is a description of the process in which the Board and officers automatically cede their decision-making authority to the general membership on an indefinitely renewing annual basis.
Legal requirements often also extend into how capital is handled, tracked, and dispersed within the cooperative - these realities are discussed at greater length in the key issue sections on “Capital” and “Relationships of Coercion.”
Finally, certain legal requirements can interact with membership application and selection processes, which can either result in rendering the cooperative’s selection methods illegal or require special steps of the cooperative to document and make publicly accessible its record of how and why it did or didn’t onboard a particular applicant. As an example, while a housing cooperative might want and need to reject an applicant because they "seem uncooperative," but doing so for this reason without proper documentation or explanation can violate certain housing access laws put in place to combat racial, ethnic, class, gender, ability, and other forms of discrimination in housing.
ONCE YOU’VE SEEN ONE COOPERATIVE...
It is possible to track patterns among cooperatives of similar sizes and ages, but – as with all things with cooperatives – there is no such thing as a one-size-fits-all solution. Additionally, there is no such thing as a “cooperative structureTM.” However, there is considerable influence from conventional business culture - and even within the cooperative development sector (professionals that help others set up their cooperatives) - that directs new cooperatives to structure themselves in certain ways (e.g. forming the aforementioned Board of Directors) during their initial set-up and start-up.
However, newer cooperatives are often not at a point in their development to easily separate governance and operations or, in other words, day-to-day and long-term decision-making. Even basic operational questions one could categorize as day-to-day may be precedent setting in determining a practice for the long-term - it is important the cooperatievs can remain flexible to seek out their most natural and effective structure. Smaller cooperatives simply do not have enough members or time to have many contrasting positions (e.g. assigning people either distinct governance or operational roles) or dedicated decision-making events (e.g. holding both operational and governance at different times), though they may elect to prioritize decisions and actions in ways guided by those distinctions.
While strong divisions between these activities have been successful for some cooperatives, youth cooperatives are typically both new and small in membership size, so creating and maintaining rigidly structured governance and operations systems before they fully know how their cooperative system naturally operates can be counterproductive. Generally speaking, the Cooperative Identity does not require any particular structure or process. Instead, structure and process should be crafted in response to and in support of the organic function of a group, rather than tasking members with making sense of and conforming to meticulously designed systems that might look better on paper than in practice.
BOARD - Y/N?
As discussed, many cooperatives differentiate between operations and governance and do so most often by relegating all governance activities to a Board of Directors. The Board is typically elected from the membership, sometimes with special non-members appointed (e.g. representative from a neighboring cooperative), or - much less common, but present most in worker cooperatives - the Board is defined as any members present for a meeting at a certain time and place. The concept of a Board of Directors removed from daily organizational function has, as explained in the “Corporatism” section in “Words Mean Things,” its origins in violent, commercial colonization. That said, there are certainly instances in which a Board has been of the highest service to a cooperative, though it is often a “default” structure that has presented some significant challenges to the Cooperative Identity in more tightly aligning many cooperatives with capitalistic modes of functioning.
Predominant cooperative development theory suggests that, before launch, a cooperative should have a “Steering Committee” (or comparable) that then transitions into a Board upon the “launch” or first day of operation of the cooperative. Alongside common legal requirements and their ubiquitousness in conventional corporate culture, the prevalence of Boards in cooperatives is also due in part to the prevalence of this "start-up committee --> Board of Directors" practice among many conventional cooperative developers. If this practice is undertaken and the cooperative decides it would like to adopt a different structure, it is very difficult - but not impossible - to dismantle or replace the Board. It often requires that the then Board either remove itself unanimously or nearly unanimously from power, or the full membership must be sufficiently organized to be able to convene a meeting that achieves quorum and approve a vote. Most people would struggle to think of an example of people freely ceding newly found authority, further complicating such a process. Depending on the size and type of cooperative, convening the quorum needed for an all member decision of that nature is often very challenging. And, generally, it is much harder to undo something entirely and create something new in its place, rather than keep a flexible structure that you can slowly curate according to the possibly changing needs of a cooperative in its early stages of existence. Having a start-up or steering committee during the initiation of a cooperative does not mandate that the cooperative have a Board.
There are no specific structures or systems inherent to a cooperative enterprise, with the exception of the abstract concept of “membership.” The membership is structurally and procedurally manifest most clearly in the “General Assembly” (or All-Member Meeting, Membership Meeting, etc.) that convenes all members of a cooperative. General Assemblies are often organized to only include governance considerations, though that is not a universal practice (Once You’ve Seen One Cooperative…). No matter the cooperative, its ultimate power lies with the will of its membership, unless that power structure is negated by legal requirements or internal policy or practice out of step with the Cooperative Identity.
While the General Assembly may be the ultimate seat of power in a cooperative, it is a trend among many cooperatives to have “performative” membership meetings in which long-term strategies and decisions are not made but are, rather, presented to be “rubber stamped” or simply approved by a relatively disengaged membership. Typically, this is a symptom of a cooperative which has ceded most of its power to the Board, which essentially runs the cooperative and very infrequently – once or twice a year – engages the membership via symbolic, performative votes. “Let us give the general assemblies the attention they deserve and the life they need” (Arizmendiarrieta, 1999, 102). While one interpretation of members’ seeming willingness to be hands-off with the governance and control of the cooperative is a strong trust in Board and/or staff, a cooperative without a fully educated, trained, and informed membership is not truly a cooperative in practice. Most such cooperatives began with much higher rates of engagement.
This devolution of governance is most common for consumer/user cooperatives (e.g. insurance, credit unions, retail food, utilities) that employ professional staff, as well as financially large cooperatives employing professional staff - including many of the aforementioned consumer/user cooperatives in addition to producer cooperatives. This is not an inherently negative phenomenon, though - sadly - it often is, and contentious union campaigns of non-member workers makes this visible.
Frequently, the level of engagement of the membership in governance tends to reflect how significant the cooperative is to a given member’s day-to-day life, despite how impactful the cooperative might be on the member’s overall life. For example. a member in a worker cooperative likely engages with the cooperative's governance almost daily, as their participation is required to deliver them the personal fulfillment and financial resources they need to survive. However, a member in an electric utility cooperative likely engages, at most, once a year with the governance of their cooperative, while using the electricity from the cooperative every day, because the cooperative does not require their engagement to function. In this way, the level of governance participation of a member is often proportionate to their engagement in the day-to-day functioning of the cooperative --> in other words, participation in operations is proportionate to governance.
This brings up many questions about -
- the integrity of cooperatives with disproportionate engagement in governance and operations between members and non-members,
- whether a non-member workforce adhers to the Cooperative Identity,
- whether non-member workers would be a reality in the absence of capitalism,
- how effective the distrinction of governance and operations is to a given cooperative, and
- how best to manage different levels of participation and needs among different roles in a cooperative.
These above issues and the role of the non-member worker within different kinds of cooperatives is a point of active discourse in the Cooperative Movement. The most popular contemporary solution is the multi-stakeholder cooperative, in which all those that participate in any way in a cooperative have a membership role with decision-making power in the General Assembly - though those roles and their responsibilities may vary. The multi-stakeholder cooperative model is more common among less wealthy communities (e.g. La Cooperativa Nacional de Servicios Múltiples de los Maestros, COOPNAMA, in the Dominican Republic which includes teacher services, financial services, a resort, furniture stores, etc.), and among those practicing cooperativism under different names (e.g. mutual aid groups).
Some challenges that arise from ineffectively organized governance and operations system(s) within a cooperative that are often used as reasons to justify or delegitimize a given structure:
Lack of Transparency
Insufficient or distorted information flow can result in a disengaged and disenchanted membership. In many such cases, members would enthusiastically participate in a cooperative's function if they had both the necessary information alongside sufficient education and training to interpret that information. Additionally, when information, education, and training are not properly distributed to all members in a cooperative, it creates a power imbalance, and a conflictual dynamic can arise between those with information and the power to interpret and act upon it versus those who feel alienated because they lack information and/or the power to interpret and make us of it. For example, many people are unfamiliar with how to read financial reports, so when they are distributed without a narrative explanation and/or training around their interpretation, those reports are meaningless to those who cannot understand them. In many cultures, humans respond to such experiences of being unable to understand with shame or humiliation, assuming their inability to understand is a personal failing. As a result, this can cause members to further disengage and isolate from the group. Full transparency and information equity in cooperatives cannot be achieved without the support of adequate education and training. The Fifth Principle, often written as "Education and Training," is actually "Education, Training, and Information" for these reasons. Cooperatives, when fully living out the Cooperative Identity, are entirely transparent and accessible, no matter their chosen structure or how their various organizational systems are designed.
Poor Community Care
It is an essential part of cooperative practice that a cooperative care for its community of impact, which is expressed primarily in the Seventh Principle of “Care for Community,” as well as in the Sixth “Cooperation Among Cooperatives” and a few Values. There are various ways to facilitate the participation by members of the community within a cooperative’s structure that is reflective of the impact experienced by the community. Firstly, having good information flow within the cooperative ensures that any outside input will be able to be integrated into the cooperative's deliberation processes. Additionally, it can be difficult for an individual community member to know how to approach your cooperative to engage - having a clear and public way for individuals or groups to connect with your cooperative can address this. Cooperatives are not closed systems and have a much broader ecosystem of impact than their membership.
Outside Director Seats
It is somewhat common to appoint or elect outside directors to reserved seats in youth cooperatives with Boards of Directors, often to support the cooperative's sustainability and institutional memory in the face of high membership turnover. Some student cooperatives choose to have non-student representatives from any affiliated educational institutions on the Board, typically a faculty or staff of that institution. Such an arrangement can bring difficulties - if they are older than the other Directors, the young members may defer to their perceived “expertise,” if the Board is representational of a certain subset of members, the non-member essentially has more power in the cooperative than members; and sometimes outside Directors are poor at self-facilitating and being aware of when and how their perspective is important and may overexercise control. On the flipside, sometimes these elder or longer-term outside Directors can provide important institutional memory, allyship, and support in the face of conflict or issues with the broader community, as well as, indeed, certain kinds of expertise.
One of the most common critiques of cooperative enterprises is that their decision-making processes are so slow they are ineffectual; unable to properly respond to threats or opportunities. In some cases, this critique is more than fair – particularly when the authority and discretion of those most engaged in the day-to-day functioning of the cooperatives is limited in favor of empowering a distinct governance structure that does not meet regularly, delaying a cooperative's response to an inquiry or issue.