What is a Cooperative?

A Cooperative is a type of business that has been around for some time. Searching the web, I have found a number of definitions, each of which is somewhat different. Essentially, a cooperative is a business that is owned by its members. Members of a cooperative usually own an equal share of the business, with an equal vote in the governance of its affairs.

Cooperatives with equal members may work for smaller interest groups that are supported by equal contributions from all members. I know of a couple that have requirements for a specific amount of community service or contributions from all members. I'm not sure this would be practical in a blog cooperative that was not regionally based or that contained a very strong "birds of a feather" core group making the most significant contributions.

Depending on the nature of the business, the issues surrounding required contributions for membership become increasingly complex and difficult to resolve fairly. In an artistic coop, how do you rate the contributions from members? Will the member working for four hours each night get the same rights as the member who works for half an hour every other weekend? Maybe one of those half hour sessions results in something of greater project worth than the 20 hours from the former member. This could result in some fierce debates and potentially divide a very good group into factions spending more time debating than creating. These are just a couple issues I have been considering lately. I am leaning towards a hybrid form of governance that is democratic but not communal.

These ideas for governance and ownership are in the context of a creative media blog cooperative.

1. A core membership board is elected by all current coop members. The board should consist of a representative from each organizational area (musicians, writers, directors, video and audio producers, cinematographers, etc. for example).

2. The membership board evaluates potential new coop members and determines the requirements for membership based on discussion forums that all members participate in.

3. Non-members may participate in coop projects and contribute to coop discussions. Each project is evaluated upon completion and participants are rated based on their contributions to the overall success of the team. These ratings are considered when new member applications are reviewed by the membership board.

4. Ownership is project based. Each project is independently billed and shared based on guidelines established at the formation of the project team. Each member agrees to the profit sharing arrangements before the project is started. If they can't agree on terms, new members are added as replacements for those who abstain or the project is killed due to lack of support.

5. Each project is responsible for supporting the common costs associated with operating the coop system. New development costs are approved by an elected operations board. How these costs are divided among projects is determined by the operations board based on open forum discussions.

6. Project selection and contract negotiations with customers are conducted by the working project team. Projects that are extremely offensive in nature can be ejected from the coop by the cooperative's vision board. This board is democratically elected by all members and is subject to change at any time based on a majority consensus. The composition of the board should be changed at least once every year in my opinion.

7. New services and major changes in coop resources should be determined by the operations and vision boards working as a unified group. Changes in member services and system resources should be decided by the membership and operations boards. Member dismissals and project category restrictions (porn, supremacist groups and terrorism related messages for example) should be voted on by the vision and membership boards.

My objective was to provide a democratic system of governance that doesn't burden every member with continual calls for votes on organizational issues. I attempted to define a system that would allow checks and balances between different groups in the coop. I also hoped that dividing governance into primary areas would allow members to contribute in areas that suited their personal strengths.

One of my main goals was to avoid the possibility of exploitation and tyranny of the commons. I have a couple posts that may explain this last concern in a little more detail.

http://www.creativecontent.org/ccontentblog-archives/000020.html
http://www.zero-d.org/zeroblog-archives/cat_alternative_organizational_forms.html

These are ideas that I would like to get comments on in the hope that they can be refined or completely altered for a project that is a sort of SourceForge for the Arts. Constructive criticism is very welcome.

Member owned cooperatives (e.g. credit unions) are very different than employee owned cooperatives. A member owned cooperative can be a very undemocratic place for workers, even while it is a very democratic place to do business with (shop, bank, etc.). Disproportionate owenership (shares) of cooperatives is possible, although rare.

Good point, Steve. There is an important distiction between the two. However, the idea here that blog cooperative would have zero employees - it is the members who do the work of the cooperative. I suppose you could say that each member is also an employee, just not in the conventional sense.

One of the most interesting examples of a sucessful cooperative that matches what Mark is describing is St. Luke's in London. They're an ad agency that was the London division of Chiat/Day. When Chiat sold to Omnicom they decided to buy the agency and make it employee owned. Each employee gets an equal part of a pool of shares distributed each year. As you work there longer you accumulate more shares. There are a number of interesting things about this company. Here is an article in Fast Company: http://pf.fastcompany.com/magazine/06/stlukes.html

Andy Law, one of the founders has a great book called Creative Company that tells how the agency was established. They found an old British statute that specified a unique form of qualifying employee owned trust. Check out the article. It has some good points that are in harmony with this project.

Just to say, officially a co-op is:

"an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise."

see http://wiki.uniteddiversity.com/co_operative_principles

Will be back soonish with plenty more...

That's a great link Josef. Thanks.