Multistakeholder Co-operatives

1. Widening participation without diluting democracy Multistakeholder Co-operatives

2. Swindon Pulse Wholefoods – a workers co-op in which customers have no voice. Coniston Co-operative Society – a consumer co-op in which workers have no voice. Both work well, but shouldn't it be possible to have a co-operative business in which all key stakeholders have a voice? Two shops, two stakeholders

3. Community co-ops include everyone – but consumers tend to outnumber workers at general meetings, while workers might find it easier to participate on the committee. Secondary co-ops can operate a partnership between a consumer co-op and a workers co-op; but this is unwieldy. 'Golden shares' and reserved places on the board can be used, but they don't provide for participation throughout the governance of the co-op. Some solutions...

4. Stakeholder analysis: who to include?

5. Our solution is to create different 'classes' of share for each stakeholder group. These groups then control the co-operative at its general meeting in fixed proportions. This is useful for a number of different types of co-operative: - Community supported agriculture - Community land trusts - Employment creation projects - Vertical integration Different classes

6. Another stakeholder group that might be relevant is investors. In other European countries, workers co-operatives in particular have grown by raising share capital from investors. They need enough of a say in the co-operative to protect their investment – but not so much that they can control its activities. Co-operative capital

7. In 2007, the FSA ruled that – for reasons of consistency across Europe – non-user members (such as investors) would be allowed to join co-operatives provided that their powers were limited. A multistakeholder co-operative can create a class of membership for non-users. This class can have 25% of the voting strength in general meetings: enough to block rules changes, but not enough to set the strategic direction. Non-user members

8. 2 10 5 2 + 3.9 + 3 =8.9 out of 22 100% 39% (5.5/14) 61% (5.5/9) Consumers Workers Investors Voting at general meetings

9. There are a number of different methods that could legitimately be adopted: candidates could stand in one constituency only, and each constituency elects a fixed number of Directors or each class could prioritise a single list of candidates, or candidates could be voted on in turn. However, there must be a resolution to appoint the board that is approved by the whole meeting. The board of directors

10. Principle 1: open membership Principle 2: one member, one vote This remains true within each class; you can think of a multistakeholder co-operative as being like a secondary co-operative, where voting is fair but not necessarily equal. Principle 4: autonomy and independence It is generally recognised that provided that non-user members are limited to 25% of votes and cannot vote for demutualisation, this is upheld. Are they consistent with co-operative principles?

11. IPS Co-operative Multiple classes and non-user members Organised around the co-operative principles – including 4, 5, 6 and 7 which are often neglected Commonwealth Council Mission led Social accounting 'Key decisions' The Somerset Rules

12. Used by GOCO, Ecological Land Co-op, Manchester Veg People, Fresh from the Fields Community Composting, Worcestershire Coalition for Independent Living, Somerset Co-op Community Land Trust, Co Cars... Revised and updated in the light of experience After two years of the Somerset rules