Principles and Values
The International Cooperative Alliance (ICA) adopted the updated Statement on Cooperative Identity in 1995, which includes the concept of cooperative values and the seven cooperative principles outlined below. You may also review the Cooperative Principles and Values Guidance Notes, which provide comprehensive guidance and recommendations on how to apply the Principles to cooperative enterprises.
Note: The short descriptions that follow each principle have been developed by CHF Canada especially for housing co‐ops. You can find more general descriptions of the co‐op principles on the ICA website at https://www.ica.coop/en.
Self-help, self-responsibility, independence, equality, justice, and solidarity are all values that cooperatives are built on. Cooperative members believe in the ethical ideals of integrity, transparency, social responsibility, and caring for others, as did their founders.
Cooperative principles are guiding principles that cooperatives use to bring their ideas into action.
The cooperative principles assist cooperatives in putting their values into action. Since the Rochdale Pioneers first laid out their principles in the mid-nineteenth century, they have undergone many revisions to represent the ideals of the international revolution in an ever-changing world.
1. Voluntary and Open Membership
Cooperatives are voluntary organisations that are open to anyone who can benefit from their services and is willing to take on the obligations of membership, regardless of gender, social, cultural, political, or religious differences.
The Rochdale Pioneers placed a high value on open membership. Discrimination was common at the time. You couldn’t enter or use an organization’s services unless you were from the right social background or practiced the right faith. Everywhere, women were marginalized. Coops are the polar opposite. Anyone who may benefit from the co-op and is willing to take on the duties of membership should be qualified to join.
What does this mean for a 21st-century housing cooperative? Clearly, housing cooperatives cannot admit everyone who applies; they have a limited number of units to sell. But that does suggest that when it comes to recruiting new members, the co-op should be transparent and welcoming, and it is the board’s responsibility to ensure that there are as few obstacles to membership as possible.
2. Democratic Member Control
Cooperatives are democratic organisations in which participants actively engage in the formulation of policies and decision-making. Elected officials, both men, and women are responsible for the membership. Members of primary cooperatives have equal voting rights (one member, one vote), and cooperatives at all levels are democratically organized.
Our housing cooperatives appear to function democratically to us. A cooperative’s base is democracy. This theory was crucial to the Rochdale Pioneers: co-operatives are owned and managed by their members. However, democracy does not happen by accident, and co-op governance plays an important role in ensuring that members have the opportunity to make decisions that affect them and that they genuinely feel like members of the co-op rather than just consumers.
3. Member Economic Participation
Members contribute equitably to the cooperative’s resources and have democratic influence over it. At least some of the capital is normally owned by the cooperative as a whole. Members typically earn little, if any, reimbursement for capital contributed as a condition of membership. Members distribute surpluses for any or more of the following purposes: expanding their cooperative, possibly by establishing reserves, at least a portion of which will be indivisible; benefiting members in proportion to their cooperative transactions, and promoting other activities authorized by the membership.
The third principle clearly demonstrates that, while members are expected to contribute financially, coops prioritize people over profit. In a housing co-op, we apply this idea by appropriately assigning members’ contributions. We do not make investments or interest on our members’ shares or deposits. Instead, we put the money we make from them into properly running the co-op and keeping a fund for the future. Members are able to forego a return in exchange for a monthly housing fee sufficient to fund these goals. In return, they expect sound management and a long-term strategy for the cooperative.
4. Autonomy and Independence
Cooperatives are self-help organisations that are managed by their members. If they enter into agreements with other organisations, such as governments, or collect capital from outside sources, they do so on terms that guarantee democratic control and cooperative autonomy for their members.
Many of the principles are subject to government regulation, whether by a negotiated agreement with the government or because their activities are governed by laws. And, on occasion, cooperatives can run into difficulties and need additional government assistance. In return, they might be forced to give the government more power over the cooperative, at least for the time being.
As a result, a housing cooperative’s autonomy can be restricted. However, it isn’t completely gone. In reality, we must be very careful to retain power over the things we do regulate because of the government’s position in the cooperative. The co-op establishes its own rules and bylaws, as well as how it will be run. The co-op’s governance is still the responsibility and accountability of the board of directors.
5. Education, Training, and Information
Cooperatives offer education and training to their members, elected officials, administrators, and workers so that they can effectively contribute to their co-ops. They educate the general public about the nature and benefits of cooperation, especially young people and opinion leaders.
Education, in its broadest sense, has been a cooperative goal since the beginnings of the modern co-op movement in Britain. We put the idea into practice in our housing coops by encouraging participants to learn about their coop’s operation and their position in it, as well as how their coop fits into the larger coop movement.
Good governance promotes the value of education and training by ensuring that it is factored into the cooperative’s budget. Your members will become more effective in their co-op participation and will learn skills that they will apply in their everyday lives. And it was with this in mind that the Pioneers emphasized the importance of education.
Also note the importance of educating young people about the existence and benefits of coops, as mentioned in the ICA description of the fifth principle. Planning for the succession of a leader is a critical part of leadership. The board needs to find ways to involve the younger co-op participants in ways that will help them develop into tomorrow’s co-op leaders.
6. Cooperation among Cooperatives
Cooperatives work together through local, national, regional, and international structures to best represent their members and expand the cooperative movement.
We are more efficient when we work together. That was the belief of the first co-operators, and we know that still holds true in today’s housing cooperative movement. That is why we band together as housing cooperatives and expand our movement by doing business with other cooperatives wherever possible.
When we join what is known as secondary coops – a nationwide network of federations – we share our knowledge and ideas, provide for our education and mutual support, combine our buying power, and talk in one voice to the government and the general public. The fourth co-op theory, which we discussed earlier, makes it easier for us to preserve our autonomy and freedom while we work together.
7. Concern for Community
Cooperatives use strategies endorsed by their members to work for the long-term sustainability of their neighborhoods.
Housing cooperatives are uniquely positioned to have a positive impact on their communities. They are a constant and noticeable presence in their immediate surroundings, and they can make a difference. More broadly, housing cooperatives can be positive factors in a variety of neighborhood concerns with global implications, ranging from the need for more affordable housing to the most pressing environmental issues of our time.
It’s important that we keep in mind that cooperative ideals have real value for us. If we think about them at all, we can easily dismiss them as ideals unrelated to the business of managing and controlling our coops. However, as you can see, they are extremely important to how we run our cooperatives and coexist as group members.
Not only can we keep alive the ideals and beliefs of the Rochdale Pioneers by paying attention to the coop principles and implementing them in our own housing coops; we can also learn lessons for better governing our own coops and enhancing the quality of life for our members today by paying attention to the coop principles and applying them in our own housing coops.
This brief guide to the international co-op principles and what they represent for housing co-ops governance by CHF Canada on good governance and principled leadership. If you haven’t already, we recommend that you read Getting Our Co-op Principles Right. It will assist you in getting the most out of what we say here about cooperative principles, as well as provide you with plenty of food for thought on the topic of cooperative governance.