The chances are you have popped into a convenient co-op food store at some point, whether at home or on holiday. But did you know there is so much more to co-operatives than just somewhere to buy a pint of milk in a hurry? As Brightkidz is a co-operative we’d like to tell you more. So what is a co-operative and why is it special? A co-operative is a business which is democratically controlled and owned by its members rather than by institutional investors or distant shareholders. The members may be the employees (as in a worker co-op like Brightkidz), customers or users. Co-ops are guided by seven principles of co-operation and often exist to provide a solution to a particular problem in their own community. As well as the familiar co-op food stores there are many other kinds of co-operative business across the UK – insurance, energy, football supporter clubs, digital communications, farmers, community-owned pubs, artists, healthcare, manufacturing… of course not forgeting those of us working in road safety and sustainable travel! They vary in size from small to multi-million pound businesses. Here in the UK co-ops employ a quarter of a million people and have over 13 million members – that’s a lot of people having their say on how businesses are run.
There are two kinds of co-operative ownership. ‘Shared ownership’ is when the members all own an equal share of the business and receive an annual dividend which is a share of the profits. If the business folds, the remaining assets are divided up amongst members. ‘Common ownership’ is when the members have democratic control of the business but assets cannot be shared out. This means if the business is ever wound-up or sold any assets cannot be distributed to the members and must be passed onto another like-minded co-operative. Also for many, like Brightkidz, any profit is ploughed back or spent on activities relating to its core aims. Brightkidz is a common ownership worker co-operative.
There are seven principles which guide co-operatives and help them put their values into practice. Here we take a look at these principles, how they are defined by the International Cooperatives Alliance (ICA) and examples of how they are used here at Brightkidz.
1st Principle: Voluntary and Open Membership
ICA: ‘Co-operatives are voluntary organisations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.’
For Brightkidz: As a worker co-operative, all employees have the chance to become members after a minimum period of employment.
2nd Principle: Democratic Member Control
ICA: ‘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 co-operatives members have equal voting rights (one member, one vote) and co-operatives at other levels are also organised in a democratic manner.’
For Brightkidz: Each member can vote for directors at the annual general meeting (up to 15 directors can be elected). Members can be elected to the board after one year of membership. The Board of Directors make the strategic decisions in the business and have legal responsibilities.
3rd Principle: Member Economic Participation
ICA: ‘Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.’
For Brightkidz: Through the elected Board of Directors, members have a say in where any profit goes, but it must be spent on activities Brightkidz supports (sustainable transport, active lifestyles or road safety initiatives) or put aside to help the organisation grow.
All the money used to start the business came from grants and loans (including director loans); not share capital. Although each Member automatically owns a share in the company their share cannot be sold and they cannot receive dividends (as Brightkidz has common ownership status) so they do not get a share of any profits.
If the co-operative is wound up with assets remaining these will be distributed to other co-operatives or charities with similar aims. If Brightkidz co-operative is wound up with no assets remaining, members pay £1 which is a token liability. Members have an ‘economic interest’ in Brightkidz doing well because they get salaries for the work they do.
4th Principle: Autonomy and Independence
ICA: ‘Co-operatives are autonomous, self-help organisations controlled by their members. If they enter into agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy.’
For Brightkidz: If we have partnerships or agreements with other organisations or governments, or if we apply for any loans this is agreed by the Board (elected members).
5th Principle: Education, Training and Information
ICA: ‘Co-operatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives. They inform the general public – particularly young people and opinion leaders – about the nature and benefits of co-operation.’
For Brightkidz: Staff are encouraged to go on relevant training courses to increase their skills for their jobs.
We run educational projects, eg promoting road safety and walk to school schemes. We take part in events such as Social Enterprise Day and Co-operatives Fortnight to promote social enterprise and co-operative business models.
High vis waistcoat and snapbands custom printed for the Co-operative Group
6th Principle: Co-operation among Co-operatives
ICA: Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.
For Brightkidz: our preferred suppliers are other co-operatives. Our first product – high vis waistcoats were manufactured by Queen Eleanor, a former local clothing co-operative. We use the Co-operative Bank and we have had loan funding from Co-operative Action. Our logo re-design was done by Calverts, a design co-operative.
For over eight years we supplied the Co-operative Group with fluorescent, reflective waistcoats and snapbands for their scheme to promote Walking Buses within schools in the UK.
As members of Co-operatives UK we can keep up to date and involved in the world of co-operatives.
The following organisations support and promote co-operatives. See their websites for more in-depth information and examples. The International Co-operative Alliance. Co-operatives UK.