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The Second Cooperative Principle

The International Cooperative Alliance (ICA) has established seven principles as guidelines by which cooperatives put their values into practice.

The Second Principle is Democratic Member Control:

“Co-operatives are democratic organizations 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 votes) and cooperatives at other levels are also organized in a democratic manner.”

Democracy includes the right to participate in decision-making. Whether in government or in business, democracy must include the right and responsibility to meaningfully engage in the process of making important decisions.

We pride ourselves on living in a democratic society; we build social and political identities based on how we vote and our civic participation. Yet, for most people, it is unremarkable and unquestionable that there is no democracy at the workplace. Even though people spend far more time at their job than at the voting booth, and the culture and conditions of a job can be at least as important as those of local and national politics, it is simply accepted as a matter of course that there cannot be democracy at work.

Cooperative businesses do it differently: a core feature of Co-ops is democratic governance. The members hold the power.

The specifics of how democracy is applied in a Co-op can vary widely. Perhaps the members only vote to elect the Board of Directors. Although a distinguishing feature of most Co-ops is using a one-member one-vote system (as we do in political elections), in contract to a typical corporation in which a shareholder gets to vote in proportion to their ownership. Imagine if the wealthy could cast multiple votes in US elections… I don’t believe it would feel very fair, and yet no one questions that most business entities operate in such a fashion. Or perhaps, a Co-op may employ much more direct and deliberative methods for almost all decisions (practices such as Sociocracy rely upon the consent of those members who shall be affected by the decisions). In multi-stakeholder co-ops where some members may themselves be multi-member entities, a greater degree of complexity may be necessary and appropriate. Co-op founders should take the time to consider what kind of democracy is best suited to their organization as they build the structure.

Democracy only works if people actually participate. Co-ops must engage and educate their members not only to show up, discuss, and vote, but also to take on the roles of responsibility and leadership within the organization. Carefully designed bylaws can assist this process by forcing turnover of leadership roles and lowering the barriers to assuming responsibility. Policies and practices should always include transparency and openness as foundational for governance.

We believe that structures implement principles. Thoughtful and considered formation, or re-formation, of your business can give you bylaws, agreements, contracts and policies that can place these values at the core of your organization, not just an afterthought.

Is your business a place of democracy?


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