Cooperative elections provide a focus point for members to have a say in running their business. Indeed, elections are an integral aspect of cooperatives. Today we are taking a look at why cooperatives hold elections and for what positions.
Ultimately, much of the laws and customs regarding cooperatives vary on an international level, and similarly on a domestic level. Despite this, cooperatives from all cultures and countries exist for one reason: the maximum benefit of their members.
While most companies exist to serve their shareholders – whose interests are generally maximum profit, cooperatives – regardless of sector – aim to help their members in the best way that they can. For a credit union (a financial cooperative) this may indeed be financial, providing cheaper loans and better rates of interests by a community collectively saving their money. A worker-cooperative, on the other hand, may seek stable employment, fair trade practices and good working conditions.
This raises the question, however, how to decide what is best for the cooperative and who should run it? Smaller cooperatives can obviously do this collectively, but as a cooperative grows it needs to remain both accountable and competitive.
The answer is obvious – cooperative elections.
A Board of Directors accountable to its members.
Boards of directors are an efficient way of running businesses. A small group of experts can quickly manage and delegate tasks to ensure that a business survives. The board of directors in any business is arguably the most important body of workers. They make decisions – for better or worse – that affect the company at large: their workers, suppliers, customers and often their local neighbourhood.
Standard companies are run by CEOs and a board of directors. The CEO is usually accountable to the board, who are accountable to their shareholders/investors, and to some extent their business partners. Cooperatives, on the other hand, select their entire board through member elections. Terms are typically 3 years (although this varies based on each cooperative’s bylaws). A board that performs badly by upsetting their membership base in any way is accountable to their members and investors alike.
Cooperative elections are a prerequisite for executive positions and are required by law. While elections are needed for cooperatives, the way in which these are conducted is up to the cooperative’s discretion.
In comparison to businesses where votes are weighted to favor larger shareholders, cooperative elections are conducted on a strict one member, one vote policy. This ensures that the lowest worker gets the same say as the richest investor. The idea is to make sure that all aspects of the business are represented. While worker’s interests will be aligned with job security, working conditions and fair pay, an investor might be interested in broader aspects of the business.
The issue with larger scale voting in cooperatives is that the ability to vote hinders the legitimacy of the council. Increasing access to voting by introducing online voting. Online voting is easily combined with postal and traditional ballot box voting. This enables cooperatives to be more engaged with their members who ensure that the board is acting in their best interests.