Welcome member capital

The 3rd co-operative principle says:

Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative.

Notwithstanding the position of Co-operative Travel and the recent changes at the bank, the Group itself does not apply this principle. Members are given a card that looks and feels like a loyalty card. The members of the Rochdale Pioneers had to save up to buy their share when £1 meant a lot more than it does now. Many members have expressed dismay that they were not given an opportunity to provide some of the capital needed to save the bank, or to pay for the new headquarters at Angel Square.

With modern technology it would not be difficult to devise a way for members to have a much more significant stake, perhaps with the same opportunity that the Rochdale Pioneers had to build up that stake over time.

Not only could member capital help reduce the need to sell assets and borrow money, but by offering members a more significant financial stake, membership - ownership - would take on real meaning.


Think your suggestions for membership are much more inclusive.

The original principle of the co-operators, the banks origins were in deposit accounts with regional societies which were a major source of capital for investment. If you introduce proportional investment to influence then you have a plc rather than a co-op.

That no one on the boards have made this happen just goes to show how un-innovative and staid they are and how much radical change is needed. Meanwhile, just one crowdfunding site - Kickstarter - has raised over $1 billion from millions of people around the world, over half of which was raised in just the last 12 months. Moreover, the original contribution of the Rochdale Pioneers (I think it was 2p/ week or something like that) is actually about £10/ month in today's money (I worked it out once using a Bank of England calculator). Just imagine if all the millions of The Co-op Group members were also pooling that sort of money. We certainly wouldn't be considering selling off the 90,000 hectares of land which is arguable our greatest asset (despite the idiocy of mostly growing for others and only 2% ending up in stores - another huge sign of ineptitude).
roryridleyduff's picture

One my PhD students has encouraged me to join this site and contribute ideas from the FairShares Model - this model combines co-operative shares and a quasi-ordinary share system to allocate the value created by a business to its consumer and worker members. It would mean a reform of share capital, but along the lines already advocated on this site. Labour Shares are allocated to workforce members. User Shares are allocated to consumer members. Investor Shares are allocated to those who make financial captial contributions - or (much more importantly) to Labour/User members when the enterprise generates a surplus. This is more in line with the Mondragon Co-operative who distribute their surpluses to capital accounts (rather than pay them out as dividends). This means that all the surpluses are available for re-investment in the business until a members wishes to leave or retire. However, why stop there? We can also learn from the successes of employee-owned enterprises. There are now more than 100 enterprises in the US with over 1,000 employee-owners. In my first research project into the use of capital for co-operative development (14 years ago), I came across a person who was a member of an employee-owned business in the US. Whilst an employee-owner he had to keep his capital in the enterprise. All surpluses were reinvested and he saw he shares rise in value from $1/share to over $17/share. After about 10 years, he became disastisfied with creeping managerialisation (not unlike some developments in the co-operative group). He decided to leave, so he got his capital (adjusted to the current valuation of the business) and came to the UK. When I interviewed him, he had formed a worker-cooperative using similar principles that had 8 members after 2 years, and was turning over £2m / yr. New members paid for their initial stake by working for the enterprise without pay for 2 months - they didn't have to borrow money, just find some way to survive this initial period (many were supported by other family members). So, we could combine co-operative capital with forms of mutual ownership that could transform modern co-operatives. Voting remains one-person, one-vote, and surplus distribution retain the logic of co-opertive principles (by going primarily to producers and consumers). However, this can be combined with a realistic valuation of a class of share that represents each members investment (at current values). We now have to expertise to lock these contributions into the enterprise and prevent speculation while a member wants to stay. But the power to leave, and take the capital into a new co-operative enterprise will have a massive positive (democratic) effect on executive groups' commitments to its worker/consumer members. If they don't deliver co-operative outcomes, members can take their capital to another co-operative and invest it where they do. It puts the movement before the enterprise - a good move to keep managers responsive to members. Best wishes Rory

Perhaps the old board was unimaginative. But the new board headed by Sutherland - who has now resigned - is not particularly innovative. The questionnaire I filled out as a matter of duty was vague and not very informative. I am sure Coop members, given the alternatives of selling farmland and putting in capital would have been prepared to contribute. We, as Coop members should make the board realise this as a failure on their part.

This 'save our bank' campaign has been going on for so long & I thought one of the first suggestions was that Members of the Coop Group (& possibly Bank users) would be offered the opportunity to 'invest' in the Bank - or 'buy shares' just as the original Rochdale Pioneers did. I am still happy to consider this as a really viable idea. But I think if we formed a 'Members' Group' & invested via that we would have more clout as, together, we would be a sizeable 'investor'. Why isn't this being suggested again?