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Understanding
Cooperatives: Unit
2 - Cooperative Business Principles
Handout 2 –
International Cooperative Alliance (ICA)
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STATEMENT OF THE COOPERATIVE IDENTITY
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Definition: A cooperative 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.
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Values: Cooperatives are based on the values of self-help,
self-responsibility, democracy, equality, equity and solidarity. In the
tradition of their founders, cooperative members believe in the ethical
values of honesty, openness, social responsibility and caring for others.
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Principles: The co-operative principles are guidelines by
which co-operatives put their values into practice.
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1st Principle:
Voluntary and Open Membership -
Cooperatives are voluntary organizations, open to all persons able to use
their services and willing to accept the responsibilities of
membership, without gender, social, racial, political or religious
discrimination.
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2nd Principle:
Democratic Member Control –
Cooperatives are democratic organizations controlled by their members, who
actively participate in setting their policies and making decisions. Men
and women serving as elected representatives are accountable to the
membership. In primary cooperatives members have equal voting rights (one
member, one vote) and cooperatives at other levels are also organized in a democratic
manner.
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3rd Principle: Member
Economic Participation - Members
contribute equitably to, and democratically control, the capital of their
cooperative. 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.
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4th Principle:
Autonomy and Independence - Cooperatives are autonomous, self-help
organizations controlled by their members. If they enter to agreements with
other organizations, including governments, or raise capital from external
sources, they do so on terms that ensure democratic control by their
members and maintain their co-operative autonomy.
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5th Principle:
Education, Training and Information
- Cooperatives provide education and training for their members, elected
representatives, managers, and employees so they can contribute effectively
to the development of their co-operatives. They inform the general public -
particularly young people and opinion leaders - about the nature and
benefits of cooperation.
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6th Principle:
Co-operation among Co-operatives
- Cooperatives serve their members most effectively and strengthen the
co-operative movement by working together through local, national, regional
and international structures.
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7th Principle: Concern
for Community - Cooperatives work
for the sustainable development of their communities through policies
approved by their members.
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Source: International
Co-operative Alliance website: http://www.coop.org/ica/info/enprinciples.html
Rural Development USDA: Understanding
Cooperatives - Unit 2 [Back to Unit 2]
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