Co-operative Values and Principles

Co-operative Values and Principles are internationally agreed by the International Co-operative Alliance. The most recent review and reaffirmation took place during 1995.

The seven co-operative principles are:

1. Open Membership
2. Democracy
3. Member Economic Participation
4. Autonomy and Independence
5. Education and Training
6. Co-operation Amongst Co-operatives
7. Concern for Community

These are implemented as follows in a FairShares Enterprise:

1. Open Membership - all Founders, workforce members, customers and service users who meet the qualifying contribution are entitled to apply for membership and participate in governance and wealth-sharing programmes. All workforce members, customers and service users are entitled to contribute equity capital.
2. Democracy - decision-making is on a one-member, one-vote basis, irrespective of the number of shares held, or the number of share classes to which an individual member belongs.
3. Member Economic Participation - all Labour Shareholders and User Shareholders acquire rights to buy Investor Shares up to 15% of the value of their first year of trading, and a percentage of Surplus (when made) buys Member Shares for Labour Shareholders and User Shareholders. Members who transfer (or gift) their shares to a mutual organisation can join it and participate in democratic decisions over the use of mutual funds.
4. Autonomy and Independence - a FairShares Enterprise has its own Board of Directors accountable to its members.
5. Education and Training - a FairShares Enterprise treats all its Intellectual Property as an intellectual commons for members' benefit. The FairShares Association will assist with member education by maintaining educational funds and providing course curricula.
6. Co-operation Amongst Co-operatives - the system of User Shares, Labour Shares and Investor Shares makes co-operation amongst FairShares Enterprise simple and sustainable. Each FairShares Enterprise is designed to make it possible to include suppliers as Labour Shareholders and its customers as User Shareholders. This facilitates networks of FairShares organisations that can both inter-trade and participate in each other's systems of governance.
7. Concern for Community - this is supported in both the social objects of each FairShares Enterprise and their commitment to Social Audit and reporting.

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Co-operative values are usually expressed in terms of:

• self-help and self-responsibility
• democracy and equality
• solidarity

Theses are supported by ethical values of:

• honesty
• openness
• social responsibility
• caring for others.

For an example, see the Co-operatives UK website[1].

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There are implemented as follows in a FairShares Enterprise:

• Self-Help and Self-Responsibility - the FairShares Model has an open membership system that encourages all members to become involved by contributing capital, sharing in wealth creation and participating in governance. It implements measures that have been outstandingly successful at advancing community self-help in the Mondragon region of Spain (Basque Country).

• Democracy, Equality and Solidarity - Each member and class of members has the same voice in governance. Each member has one vote (members are equal to each other), and in a Special Resolution each class must agree with other classes for the resolution to pass. In effect, each class has one vote when key decisions are made so that all three/four classes must be in favour for a Special Resolution to pass. This extends the ICA principles beyond one-member, one-vote to recognise that each type of member (not just each member) is important to sustainability. It is harder to thrive as an enterprise if primary stakeholders are excluded from membership, wealth creation and governance.

• Solidarity is achieved by balancing voting and wealth sharing rights across primary stakeholders. Amongst producers, it is secured by allowing Labour Shareholders to set the maximum ratio between the highest and lowest paid co-operative member. This prevents other shareholders (particularly investors and executive managers) from reproducing large wage differentials that exploit low paid labour for the benefit of the wealthy. While all primary stakeholders participate in setting the budget for wages, it is Labour Shareholders who decide the ratio between highest and lowest paid. By default, it starts at 3:1 and can only be changed by a Class Resolution of Labour Shareholders.

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