OCTOBER 2018

Where do co-ops fit within the FairShares model of enterprise?
p Prof Ridley-Duff
explaining the main
characteristics of
the FairShares multistakeholder
mode
A diverse co-op movement needs a variety of legal
forms – and for multi-stakeholder co-ops, these
include the FairShares model, says Prof Rory
Ridley-Duff.
Prof Ridley-Duff, in his a keynote presentation
at the conference, invited delegates to switch to a
multi-stakeholder mindset and look at how co-ops
can support solidarity enterprises.
He said the FairShares model is based on
the assumption that the exclusion of primary
stakeholders from member-ownership is a cause
of contemporary poverty.
The approach aims to bring together the people
who established the organisation; the people who
provide the labour; those who use the products
and services; and the financial investors. All
of them are investing different types of capital, be
it financial, social or labour. A person could also
invest different forms of capital into the business.
Governance and legal systems need to
recognise these contributions and reward them
accordingly, said Prof Ridley-Duff, adding: “If you
are constituted appropriately, you can offer shares
to raise financial capital from the people inside
and outside the organisation.
“You can be a company or a co-operative to
do that. And you can adopt this mindset across
different legal traditions.”
As a result, entrepreneurs get Founder Shares
(or membership); workers get Labour Shares
(or membership); trading commitments are
rewarded with User Shares (or membership);
and financial capital creation is rewarded with
Investor Shares (or restricted funds to organise
investments in the well-being of employees, user
communities and/or public benefit).
Prof Ridley-Duff argued that the FairShares
model promoted by the Fair Shares Association
was rooted in the history of co-operatives.
The three models of thinking around consumer
co-operation, social entrepreneurship and
worker co-operation are key concepts within the
FairShares model, he said.
However, the FairShares model has its own
values and principles. These are wealth and power
sharing with primary stakeholders; specification
of social purposes and auditing of social impacts;
ethical review of the choices of goods and
services offered, as well as the production and
retailing processes; and social democratic models
of ownership, governance and management.
Some groups are already using FairShares
models while operating as co-operatives. One
example is Anyshares, a United States company
that includes all stakeholder groups in voting
and dividend profit sharing. The business aims to
position itself as an alternative platform bringing
together users and service providers.
Similarly, Resonate, a co-op owned music
streaming service, is jointly owned and managed
by artists, listeners and record labels. Users pay
to listen to a song – and after they pay to listen
to it nine times, they can download it. With other
providers, listeners have to listen to a song over
100 times to own it. A platform co-op, Resonate
also uses Blockchain technology to track and
distribute payments.
According to Prof Ridley-Duff, co-operative
social entrepreneurship is more rooted in
mutuality than in philanthropy. It also tends to be
explored more within multi-stakeholder co-ops
than the rest of the movement.
“It is closely aligned with the development
of a social and solidarity economy. It’s supportive
of member participation in ownership and
it expands the notion of trading beyond
commodities and market,” he said, adding
that the UK had yet to fully grasp the concept
of multi-stakeholder ownership.
He said that more studies and legislation were
required to support the model, as well as having it
included in education curricula.
In his view, the FairShares model is a philosophy
for creating and sustaining networks of solidarity
enterprises that share power and wealth among
their entrepreneurs, producers, consumers
and investors.
OCTOBER 2018 | 29