Thursday, 18 June 2015

The Co-operative Identity in the UK - a disagreement in the co-op family?

Two very interesting consultations are underway at the moment. Here, we have Co-operatives UK continuing its negotiation with the FCA with aconsultation on the co-operative identity; and here, the ICA is asking everyone's views on its interpretation of and commentary on the famous co-operative principles.
On one point, there are signs that these two key organisations for UK co-operators might be heading in different directions. Co-ops UK says:
"If the FCA is to consider participation in any way, high value should be attached to participation through ownership, democracy, capital contribution... The FCA is right to focus on preventing the co-operative form being misused
as an investment vehicle, but should focus...on cases where rates of return [are too high]" The implication appears to be that in Co-ops UK's view, there is no difficulty in mutuals being investor-led.
Meanwhile, the ICA is saying this: "...if members are not users of a co-operative’s services, the reasons for them not being users should be analysed and their right to remain members should be considered... [in] hybrid co-operatives that merge two organisational models [co-operative and investor ownership]... consideration also needs to be given to, what, if any, are to be the voting rights of non-member [ie non user] equity shareholders..." So the ICA seem to be saying the opposite: you cannot normally qualify for full voting membership unless you participate (ie use the services) in some way.
Our approach has generally been more like that of the ICA: we think non-user membership, with strictly limited voting rights, is best for people who bring valuable things to a co-operative but do not in fact depend upon it as its stakeholders do. What do you think? Anyone can respond to those consultations.
[Update: Co-ops UK have told me that they have altered their consultation to stress that "it is possible for members to benefit from the activities of a co-operative in meaningful non-financial way without them having to participate in direct economic exchange" and 'do not advocate investor only relationships'. This is good, but there are still signs that they might be willing to tolerate them.]