The worker co-operative code of governance - Seeds for Change

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The worker co-operative code of governance - Seeds for Change

Worker Co-operative Code of GovernanceThe guide to running a successfulco-operative business


Worker co-operatives are businessesthat are owned and democraticallycontrolled by their employee membersusing co-operative principles. They arean attractive and increasingly relevantalternative to traditional investor ownedmodels of enterprise.W o r k e r C o - o p e r a t i v e C o d eo f G o v e r n a n c e


Commune de Charrecey- Plan Local d’Urbanisme – Notice annexes sanitaires – 2012ASSAINISSEMENTLa commune dispose d’une lagune dont la capacité est de 330 EQ/hb.Les eaux pluviales sont en partie traitées dans la lagune. Le réseau est majoritairement de type séparatif.La commune a élaboré un zonage d’assainissement en 2009Zonage d’assainissement collectifZonage d’assainissement non collectifA ce jour, la commune va lancer une procédure pour la mise en place d’un schéma directeur d’assainissement enadéquation avec l’évolution urbaine et démographique de la commune. Un emplacement réservé est d’ailleurs prévu surle plan de zonage afin de permettre l’évolution et l’extension du lagunageORDURES MENAGERESLa commune de Charrecey dispose d’un ramassage des ordures ménagères hebdomadaire dont la compétence relèvede la Communauté d’Agglomération du Grand Chalon. Les ordures ménagères sont prises en charge par laCommunauté d’agglomération.Par ailleurs, une collecte sélective s’effectue en porte à porte. Il offre la possibilité aux habitants de Charrecey lapossibilité de trier les papiers, les emballages et le verre et permet le recyclage d’un tonnage satisfaisant de matériaux.Pour les déchets non collectées en porte à porte, une déchetterie est à la disposition des habitants sur le territoire de lacommune de Saint-Martin-Sous-Montaigu.Les nouvelles constructions seront rattachées au système existant qui répond aux exigences environnementales etréglementaires actuelles.3


IntroductionWe all want our worker co-operatives to succeed, both as businesses and asdemocratic co-operatives.Yet we often seem to be forced to choose between theseideals. The co-operative dream is submerged by business needs, or arguments aboutco-operative principles get in the way of managing the business.The writers of this document combine many decades of worker co-operativeexperience. We realised that we already had the solution – successful workerco-operatives use good business management techniques co-operatively. It is not achoice. It is a balancing act.This Code of Governance helps worker co-operatives achieve this balance.‘Governance’ refers to the overall direction, supervision and accountability of aco-operative. This means, in practice, having the procedures in place to run yourco-operative and business effectively – from documents clearly defining whatmembership of the co-operative involves, toprocedures ensuring sound financial managementor guaranteeing that members develop skillsneeded to run the business into the future.This Code brings together the fundamentals ofworker co-operative governance for the first time.Based on the seven co-operative principles agreedby the International Co-operative Alliance in 1995,it explains how to use these principles to both runyour business and govern your co-operativesuccessfully.The Code of Governance provides a framework for you to follow and is supported byexamples, literature, contacts and case studies. Exactly how you put theco-operative principles into practice (democratically, of course) is up to you. We areconfident you will rapidly see the benefits.Yours in co-operation,Tim Gausden (On the Eighth Day), Ruth Chapple (Cycle Training UK),Bob Cannell (Suma), Siobhan Mcloughlin, Helen Barber, John Butler,Giles Simon (Co-operatives UK )Worker Co-operative Code of Governance Working Party 2006 – 20084 W o r k e r C o - o p e r a t i v e C o d e o f G o v e r n a n c e


How to use this CodeThe Worker Co-operative Code of Governance is based on the seven co-operativeprinciples. Each page in this booklet outlines a separate principle, explains why theprinciple is important for co-operatives and highlights what co-operatives need todo to live up to that principle. It offers a short, practical guide to governing yourco-operative and running your business well.This booklet does not say everything there is to say about the good governance ofworker co-operatives. It outlines what we see as the fundamentals of goodgovernance, and over the next few years we will develop and refine these byconsulting with members of worker co-operatives about what else they need from aCode of Governance.The booklet is also intentionally short. It focuseson the core features of a well-governed workerco-operative rather than providing details aboutthe policies and procedures required. Instead,these details are available on the online version ofthe Worker Co-operative Code of Governance,which we have developed to complement to thisbooklet. Here you’ll find an interactive version ofthe Code, with links through to examples ofpolicies, procedures and strategies that successfulworker co-operatives use, as well as containingother useful hints, tips and ideas.Both of these versions of the Code will evolve over time, with the booklet explainingthe basic features of a well-governed worker co-operative and the online versionproviding the detail. We hope they will become an indispensable resource for newand established worker co-operatives. But this can only happen if workerco-operative members provide feedback about the booklet and submit case studies,examples and policies for public viewing on the website. Through collaboration wecan build a Code of Governance that will provide a strong foundation for workerco-operatives across the UK.Online version of the Code: www.workercode.coopGive feedback or submit ideas and documents to: feedback@workercode.coopW o r k e r C o - o p e r a t i v e C o d eo f G o v e r n a n c e5


P r i n c i p l e1Voluntary and open membership –membership is open to all workers ableand willing to accept theresponsibilities of membership.Worker co-operatives function best as an inclusive team of members who havelong-term collective interests in the success of the business.Your co-operative should:1. Offer open and voluntary membership for those workers who are able andwilling to accept the responsibilities of membership.2. Agree the rights and responsibilities of its members (a member job descriptionor similar).3. Provide all workers with meaningful information about membership.4. Include a probationary period and membership training for workers who want tobecome members.5. Ensure the majority of workers are members and themajority of members are workers.6 W o r k e r C o - o p e r a t i v e C o d e o f G o v e r n a n c e


P r i n c i p l e2Democratic member control – membersshould actively participate in the governanceof the co-operative enterprise. One member,one vote. Elected representatives areanswerable to the membership.Worker co-operatives succeed (as co-operative businesses) when membersparticipate in transparent, fair decision-making. In all but the smallest co-operatives,some delegation of authority is necessary for members to act on behalf of thecollective.Your co-operative should ensure:1. Members actively participate in the management of the business.2. Democratic processes, or democratic accountability, in all managementfunctions.3. Members actively participate in long-term planning.4. Effective communication, both between the co-operative and its members andbetween members themselves.5. There is agreed and delegated authority for members to act on behalf of theco-operative and the business.6. There are regular reviews of the co-operative's governance and businessmanagement processes.W o r k e r C o - o p e r a t i v e C o d eo f G o v e r n a n c e7


P r i n c i p l e3Member economic participation – membersdemocratically control the capital of the business,some of which is common property. Surpluses (profits)are used for developing the co-operative, payingmembers in proportion to their work for theco-operative and other uses approved by the members.Your worker co-operative should provide the pay and other benefits that yourmembers need and want. As members, you decide what these benefits will be; youmanage the business to provide for them and protect its future.Your co-operative should ensure that:1. It builds up collectively owned financial reserves and capital.2. Its pay structure and other benefits, including non-financial benefits, are plannedand agreed by members.3. If members have individual investments in the business they are non-voting andare achievable by most workers.4. Pay levels are sufficient to sustain long-term employment and membership –to maintain skills and experience.8 W o r k e r C o - o p e r a t i v e C o d e o f G o v e r n a n c e


P r i n c i p l e5Education, training and information – provideeducation and training for members, electedrepresentatives, officers, managers and employees toimprove their contribution to the development oftheir co-operative. Promote the nature and benefits ofco-operative organisation to the public.Education, training and personal development enable worker co-operative membersto become multi-skilled workers able to undertake whatever work is required andparticipate in the management and development of the co-operative business.Your co-operative should ensure:1. All members and prospective members receive training in membership andco-operative skills.2. Members and workers receive technical (vocational) skills training for currentand future needs.3. Professional development and training for officers, specialists and electedrepresentatives.4. Management skills and techniques are acquired to permit efficient co-operativebusiness co-ordination.5. The nature and benefits of co-operativeorganisation are promoted to the public andyour local community.10 W o r k e r C o - o p e r a t i v e C o d e o f G o v e r n a n c e


P r i n c i p l e6Co-operation among co-operatives –co-operatives serve their members mosteffectively and strengthen the co-operativemovement by working together at local,national, regional and international levels.Co-operation between co-operative businesses is key to business success forco-operatives. Principle six enables co-operative businesses to ethically outperformthe private opposition.Your co-operative should:1. Network with co-operatives of all types and promote member-to-member links.2. Prioritise co-operative-to-co-operative trading.3. Practice fair and honest commercial competition between co-operatives.4. Seek active co-operation with other co-operatives to achieve economies of scale,access to business opportunities and long-term business development.5. Join Co-operatives UK and participate in national and regional co-operativeactivities.6. Actively share information and good practice with fellow co-operatives.W o r k e r C o - o p e r a t i v e C o d eo f G o v e r n a n c e11


P r i n c i p l e7Concern for community – co-operativeswork for the sustainable development oftheir communities.Co-operatives are community-based businesses. If your co-operative builds goodrelations with your local and wider communities you will create goodwill andopportunities for your co-operative and members.Your co-operative should:1. Actively control the environmental and social impact of your business.2. Agree and achieve ethical business standards.3. Operate at high health and safety and worker welfare standards.4. Prioritise and promote Fairtrade and other ethical and sustainable initiatives.5. Participate in your local, and wider, community and promote co-operativeprinciples in community activities.12 W o r k e r C o - o p e r a t i v e C o d e o f G o v e r n a n c e


A p p e n d i xWorld Declaration on Worker Co-operativesThe International Co-operative Alliance (ICA) approved a World Declaration onWorker Co-operatives in September 2005. The declaration was drafted by theInternational Organisation of Industrial, Artisanal and Service Producers’Co-operatives (CICOPA). The intention was to set a standard for workerco-operatives that can be used as an international yardstick to define what is or isnot a co-operative.Workers can be exploited by so-called co-operatives in every country in the world.Just because an organisation is called a co-operative does not necessarily make itone. To be a true worker co-operative an organisation must comply with thisdeclaration.IntroductionWe all want to improve our working life, but todo so we should strive for better, fairer andmore dignified ways of working.A properly run worker co-operative allows theindividual to take part in the democraticcontrol of their working environment and life.The co-operative has been defined as “Anautonomous association of persons unitedvoluntarily to meet their common economic,social and cultural needs and aspirationsthrough a jointly owned and democraticallycontrolled enterprise.”Photograph by kind permission of CalvertsW o r k e r C o - o p e r a t i v e C o d eo f G o v e r n a n c e13


They operate according to seven co-operative principles1. Voluntary and open membership2. Democratic member control3. Member economic participation4. Autonomy and independence5. Education, training and information6. Co-operation among co-operatives7. Concern for communityThey share common values■ Self-help■ Self-responsibility■ Democracy■ Equality■ Equity■ Solidarity■ Honesty■ Openness■ Social responsibility and caring for othersWorker co-operatives also have the following basic criteria1. They are businesses that generate wealth to fulfil their principle objectives::■ To create and maintain sustainable jobs■ To improve the quality of life of the members■ To allow democratic self-management by members■ To allow all workers to work with dignity■ To promote community and local development2. The membership of a worker co-operative is free and voluntary, but is governedby the number of sustainable jobs the business can support.3. Whilst not all workers have to become members of the co-operative, themajority should be members. And, although some non-workers may bepermitted to be members of the co-operative, in a worker co-operative themajority of the members ought to be workers.4. Members of a co-operative have a different working relationship with theco-operative than either workers in a conventionally managed business or theself-employed contractor. But, note, this relationship is not recognised by UKemployment legislation.14 W o r k e r C o - o p e r a t i v e C o d e o f G o v e r n a n c e


5. The internal regulation of a worker co-operative is determined by proceduresthat are agreed democratically by the members.6. The worker co-operative must be autonomous and independent. A co-operativeis obviously subject to UK law and regulation, but must not be subordinate to athird party in any aspect of their management, trade, employment, andownership of the means of production. Further to that, a co-operative which isset up expressly to hive off an unprofitable branch of another business, or toprovide labour for another business, is not a co-operative under the terms of thisdeclaration.Internal rulesA worker co-operative must operate according to the following internal rules:■■■■■■■■There should be an equitable pay structure for members. This can reflectdifferences in function, responsibility and productivity but should strive tominimise the difference between the higher and lower wage.The co-operative should have reserves and funds that are held in common orotherwise indivisible, and should aim to grow these reserves for the good of thebusiness.The equipment, technical and workplace facilities and organisation provided bythe co-operative should be such as to allow the business to be efficient in everyway.The co-operative must have terms and conditions of employment that complywith UK law and suggested best practice, but should always strive to do betterthan the minimum.All the management and governance structures of the co-operative should bedemocratic, and all decisions must be made democratically, or with a clear lineof responsibility to the democratic governance of the members.There must be a continuous and permanent system of training and developmentfor members, to enable them to acquire the skills and knowledge to betterthemselves and the co-operative.The co-operative should aim to improve not only the conditions of its workersand their dependents but also to help develop a sustainable community.The co-operative must not act just as a provider of labour for another enterprise,or in any way be used to drive down terms and conditions of a workforce. Theco-operative must be an independent and viable business in its own right.W o r k e r C o - o p e r a t i v e C o d eo f G o v e r n a n c e15


A well governed worker co-operative usesthe co-operative principles as a frameworkfor successful business management and ademocratic structure. This Code providesworker co-operatives with a concise guide tothe main elements of good governance.Co-operatives UKHolyoake HouseHanover StreetManchesterM60 0ASwww.cooperatives-uk.coopTel: 0161 246 2900Fax: 0161 831 7684

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