2nd International Co-operative Principle: Democratic Member Control

Introduction

The second international co-operative principle is democratic member control:

“Co-operatives 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.”*

Since the earliest days of the co-operative movement, democratic member control has been a defining characteristic of co-operatives. From the founding of the first co-operatives, democratic member control applied to all members of the co-operative, which was a very radical idea in the mid-nineteenth century. Even more impressive, this principle applied to women as well.

This second principle addresses the concept that a co-operative is a democratic organization and that members have the right to participate directly in the governance of the co-operative. With this participation comes rights and responsibilities and procedures agreed to by the membership. Many would say that democratic member control is what animates a co-operative.

“Democratic member control is a key differentiating characteristic of co-operatives in comparison to investor or shareholder-owned businesses. …member-owners have a non-speculative stake in the business enterprise run by the co-operative.”**

Representative governance is also provided through a Board of Directors elected by membership.

Importance of Active Member Participation

Democratic governance in general is a complex task, and so it is for members of a co-operative. In addition to setting policy and making decisions, early co-operatives understood the importance of democratic member control in fostering the spirit of participatory democracy within the co-operative.

Participatory democracy provides members with the opportunity to actively propose, understand, and approve key policies. GHI’s bylaws also give the membership responsibility for the removal or censure of elected representatives on the Board of Directors, Audit Committee, and Nominations and Elections Committee for cause; for the final action on a membership termination decided by the Board of Directors when the member appeals; for determining policies; amending bylaws; and for exercising final authority on everything that vitally affects GHI. 

These member responsibilities are discussed in Article IV – Membership Meetings, Section 9 – Other Responsibilities at Membership Meetings of the GHI Bylaws.  The GHI link can be found here:  https://www.ghi.coop/content/iv-membership-meetings

9. Other Responsibilities at Membership Meetings.

The membership at a meeting shall also be responsible for the removal of directors of the Corporation, members of the Audit Committee, and members of the Nominations and Elections Committee for cause; censure of present or former directors or members of committees elected by the membership; for hearing and passing upon reports of officers and committees; for final action on membership terminations decided by the Board of Directors in accordance with Article III, Section 4, and appealed by the member involved; for determining policies of the Corporationfor amending the Bylaws of the Corporation; and for exercising final authority on all matters vitally affecting the Corporation [emphasis added].

The memberships’ authority extends beyond business decisions in GHI.  The membership also has the authority to determine what services and benefits it wishes the cooperative to provide. The GHI link can be found here:  https://www.ghi.coop/content/ii-purpose-and-powers

It is also up to each co-operative to define the distinction between key decisions and what decisions are delegated to the Board of Directors and other elected representatives. “[Elected] Representatives hold their elected offices in trust “…for the immediate and long-term benefit of the members.”*** This is another reminder that co-operatives are jointly owned by all the members.

It is also important that both the Board of Directors and senior managers demonstrate their commitment to, and respect for, democratic member control by explaining key policy decisions to be decided in a concise and clear manner as well as making it clear to the membership what alternate options are available to the co-operative. Respect for this principle also should be evident in how senior staff provides service to members. 

The Importance of Engagement

It is important that a co-operative comes together to ensure that democratic control by members is real and dynamic. Members should be “…educated and informed about their rights and responsibilities as members to exercise democratic control of their co-operatives.”**** Membership in the co-operative should be meaningful and member participation needs to be actively encouraged. This means that members also have the responsibility to be actively engaged in the co-operative. Otherwise it may result in smaller groupings of members gaining a disproportionate level of control or influence in the operation of the co-operative.

Providing new, diverse, and younger members with opportunities to serve on committees, subcommittees, and task forces also is important. Creative ways to encourage these members to take advantage of these opportunities can ultimately lead to a larger pool of members willing to run for the Board. This in turn may lead to the healthy introduction and discussion of more diverse ideas by the membership to the benefit of the operation of the co-operative.

Balance between the Membership, the Elected Board of Directors, and the Staff of the Corporation

It is important that the membership in general and the elected Board of Directors not interfere with the day-to-day operation of the co-operative. At the same time, senior management of the co-operative and our elected representatives (such as the Board of Directors and elected committees) must remember and respect the rights of members to control our co-operative democratically and to make key strategic business decisions. Senior management also has a responsibility to ensure that their staff understands the role of the membership and that their staff incorporates this understanding while providing services to members.

According to GHI’s bylaws, members have the right to bring forth petitions and other business for consideration by the membership at a membership meeting.  Members also have the responsibility to stay informed of issues, to attend membership meetings, to vote on items brought to the membership for consideration, and to participate in the election of the Board of Directors and other elected representatives.

One of the biggest challenges a co-operative will likely face when implementing democratic member control is “…creating a culture that welcomes and encourages debate, rather than stifles it.” *****

Footnotes

*International Co-operative Alliance Principles Committee, Guidance Notes to the Co-operative Principles: Principal 2: Democratic Member Control , International Co-operative Alliance, https://www.aciamericas.coop/IMG/pdf/guidance_notes_en.pdf, page 15.

**Id at page 18.

***Id at page 16.

****Id at page 16.

*****Id at page 16.

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