Dr Rory Ridley-Duff, Sheffield Business School (email r.ridley-duff@shu.ac.uk) Course Leader - MSc Co-operative and Social Enterprise Management Board Member Co-operatives Yorkshire & Humber
Rory Ridley-Duff, 2012
My connection to co-operatives
Interest as an educator/researcher:
Lead author of Understanding Social Enterprise: Theory and Practice, Sage Publications (student text for post-graduate study of co-operative and social entrepreneurship). Course leader for MSc Co-operative and Social Enterprise Management, and module leader for two MSc Charity Resource Management modules, at Sheffield Business School (SBS). Frequent contributor (and reviewer) of academic articles on social enterprise / social economy / co-operative enterprise.
Interest as a practitioner:
Worked for a co-operative that co-founded Social Enterprise London (1998) Serve on four co-operative and social enterprise boards, including.
Social Enterprise Yorkshire & Humber Co-operatives Yorkshire & Humber
Co-operatives are more than successful businesses - they are a global movement that is building a better world by giving everyday people an equal say and a share of profits.
The International Year of Co-operatives is a chance to find out more about cooperatives.
Co-operatives UK, 2011, Key Messages
As well as benefiting their members, co-operatives act together to build a better world through cooperation.
Key Messages:
January to March Local impact on a global scale
Early History
Profit-sharing cooperatives started in 1761 (in Scotland) and from the 1790s in the US. The first journal for cooperatives was established in 1824 (20 years before the first set of cooperative principles). In 1834, the UK Government passed the Poor Laws Amendment Act to cut welfare payments by 50%. The Poor Laws started to distinguish between the deserving poor and the undeserving poor. The undeserving poor formed a network of Friendly Societies, and by early C20 most people in the UK, Australia and New Zealand received welfare support from them (Wienbren, 2008).
Ridley-Duff and Bull (2011), Understanding Social Enterprise: Theory and Practice: Chapter 1
Early History
The Rochdale Pioneers were a group of weavers and artisans inspired by Robert Owens view on education and welfare, and the one-person-, one-vote democracy developed in Friendly Societies. They opened cooperative stores, pooled their resources, and established principles that have been adapted throughout the world for 168 years. The 1844 Rochdale Principles
1. Open membership. 5. Political / religious neutrality. 2. Democratic control (1 person 1 vote). 6. Cash trading (no credit). 3. Distribute profit in proportion to trade. 7. Promotion of education. 4. Pay limited interest on capital.
Barcelona
Arsenal
Shareholders
In 2006, 4 major shareholders In 2006, 142,000 members, one own 87% of voting shares. member, one vote. (Now 170,000 (Now 2 shareholder own 96% members) of shares).
Leadership
President elected by members for Chair of the Board decided by four-year term (maximum two the major shareholder. terms).
69 579 885 1,825
At Barcelona, a 1 million euro bond and 5,000 member signatures are needed to stand for the board. At Arsenal, need to secure appointment by key shareholder. At Barcelona, board can be sacked by a 2,000 strong (randomly selected) General Assembly of members. At Arsenal, the board can be sacked by one person.
Source: http://www.mondragon-corporation.com/mcc_dotnetnuke/Portals/0/documentos/eng/management-model/mgc.swf
US Multinational Corporations
Capital owners typically managers and/or institutional investors (limited only by ability to pay). Special arrangements for block shareholding (with limited voting rights) may exist through employee share ownership plans (ESOPs). CEO appointed by directors. Directors appointed/elected by shareholders. Rarely find consumer or worker representatives on boards, and low engagement (hostility to) with trade unions. Increased from 85:1 to 419:1 throughout the 1990s (highest to average employee).
Leadership
Source: Mondragon, Wage Regulation, Source: Aslam (1999), US Labor Statistics. http://en.wikipedia.org/wiki/Mondragon_Corporati on, accessed 1st December 2010.
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. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership.
ICA, Third Cooperative Principle
Source: http://www.scottish.parliament.uk/s3/committees/eet/inquiries/banking/CooperationandMutualityScotland.pdf
78% of people trust co-operative businesses (compares to 18% for private business) (Hertz, 2011).
Hertz, N. (2011) Co-op Capitalism: A New Economic Model From the Carnage of the Old, Manchester: Co-operatives UKI.
Restakis, J. (2010) Humanizing the Economy: Co-operatives in the Age of Capital, New Society Publishers. Ridley-Duff, R. J. and Bull, M. (2011) Understanding Social Enterprise: Theory and Practice, London: Sage Publications. Wardle, L. (2012) Keynote Speech to the West Midlands Co-operative Meeting to celebrate the UN International Year of Cooperatives, Birmingham City Council, 23rd March. Weinbren, D. (2008) Families and Friendly Societies, Friendly Society Research Group.