The basic structure of co-operatives is what distinguishes them most from other forms of business, and why they’re so much more responsive to community needs.
- A co-operative has members, and those members have a direct say in how their co-op develops, the products and services they sell, and the prices they charge
- Co-op members make their voice heard through their voting power and control over a co-op’s Board of Directors
The basic co-operative structure is below, but variations on this model are common.
- Members collectively elect a co-operative’s Board of Directors, and may individually stand for election themselves
- A Board of Directors is responsible for governing a co-op, which includes setting its direction and hiring senior management (e.g. the Executive Director, CEO, etc.)
- The Board is accountable to a co-op’s members, and reports to them at least annually
- Senior management is responsible for operating a co-op, which includes hiring staff, program/business development, and administration
- Senior management is accountable to a co-op’s Board, and reports to the Directors at board meetings
What Co-op Membership Means
- The term “membership” has become commonplace in the business world. Membership in a co-operative is different from “membership” in consumer businesses, such as price clubs.
- A membership sold by a company is a product that profits a company owned by other people. Membership may grant consumers access to lower prices or promotional deals but, ultimately, people’s business profits someone else
- Co-op membership means people own a company, together with others in their community
- With co-op membership, not only do people gain access to lower prices and promotional deals, but they also have a say in how a co-op is run, including the values that guide its operations
- Co-operative businesses profit both their members/customers and their communities
- The membership people pay for when they join a co-op is refundable when they leave
- Depending on the co-op, a refund of a person’s share purchase may include interest, in addition to the amount he/she originally paid to join