How We Think

our blog

View Category

Many of the earliest economic cooperatives were failed efforts, and supporters knew they needed to find new ways of doing business. To support that goal, the Rochdale Pioneers of Britain was one of the first cooperatives to develop an official operating philosophy.

Eventually, those nine rules became the foundation for the entire modern cooperative movement and continue to be used by co-ops around the world today.

The Original Rochdale Principles for Cooperatives

The Rochdale Society of Equitable Pioneers was a group of craftsmen in 1844 Britain who wanted to start a cooperative storefront for their goods. Knowing that past cooperatives often failed, they first drew up a list of nine rules of conduct for maintaining stable, equality-driven operations.

Those original rules of conduct were chiefly concerned with ensuring all business was done fairly and transparently, all funds were used responsibly and for the primary benefit of the cooperative’s members, and that leadership of the cooperative was fair, equitable and democratic.

The Rochdale rules soon became a standard for cooperatives around the world and were officially adapted into the “7 Rochdale Principles” by the International Cooperative Alliance (ICA) in 1937. The principles have been revised a few times since then but have always maintained the same basic goals.

The 7 Rochdale Principles for Economic Cooperatives

Today’s codified Rochdale Principles were adopted in 1995 by the ICA and state that economic cooperatives should maintain:

1. Voluntary and Open Membership

Cooperatives should always be purely voluntary organizations, with no discrimination against any members or applicants based on gender, racial, social, political or religious factors.

2. Democratic Member Control

Cooperatives should be democratic organizations, with freely elected leadership representatives who are accountable to members.

“Primary cooperatives” (originally founded co-ops that haven’t partnered with another co-op to make a larger “secondary co-op”) should operate on the principle of “one member, one vote,” but larger cooperatives should also maintain democratic operations in whatever way is feasible.

3. Member Economic Participation

Cooperative members should all contribute economically to the cooperative and should always have a democratic voice in how its capital is used.

Capital should be held as common property of the co-op’s membership when possible and usually shouldn’t be returned to members as dividends or “bonus payments.”

Instead, surplus money should be used to strengthen the cooperative by being held as a reserve for future operations. Otherwise, it should be given as limited payments to members based on the work they’ve done for the co-op or used to fund other activities approved by the membership in voting.

4. Autonomy and Independence

Cooperatives should try to be self-sufficient whenever possible. If they need to partner with another business, cooperative or government agency, they should do it in a way that maintains free democratic principles and always safeguards the rights and capital of the members.

5. Education, Training and Information Efforts

Cooperatives should ensure all members and leaders receive the education and training they need to participate successfully in the co-op’s efforts.

Co-ops should also strive to educate their local community about the benefits of cooperatives and should especially reach out to young citizens and social influencers to safeguard the movement’s future.

6. Cooperation With Cooperatives

Cooperatives should work with other cooperative structures to advance the movement, whether those bodies are local, regional, national or global. Partnership agreements should always maintain the key democratic principles of operation.

7. Concern for Community

Cooperatives should try to be responsible citizens of their local community and work to support efforts to improve sustainable development efforts in those communities.

Principles for Cooperative Success

No cooperative is required to adopt these principles, but they’re a tried-and-tested way to maintain an equitable structure while running a successful co-op organization.

If you’re a member in a cooperative or interested in starting one, find out how a digital advertising agency can help your co-op succeed today.