A cooperative is a business or organization owned and operated by its members, who collectively benefit from its services and make key decisions through democratic processes. The structure of cooperatives is specifically designed to prioritize member needs rather than maximize profits for external investors.​

Core Components

• Membership: Individuals or businesses become members, usually with equal voting rights, ensuring broad participation in governance. Membership is voluntary and open to those who align with the cooperative's purpose.​

• Democratic Control: Cooperatives operate on a "one member, one vote" principle, regardless of each member's capital contribution. Members elect a board of directors, who are responsible for governance and strategic direction.​

• Shared Ownership: Members jointly invest in and own the cooperative. Any surplus or profits are distributed among the members, typically based on usage rather than investment size.​

• Mutual Benefit: The cooperative exists to serve its members—whether as consumers, workers, or producers—and usually reinvests in the local community.​

Common Structural Features

• Board of Directors: Elected by members, the board governs the co-op and hires senior management.

• Management: Senior managers oversee day-to-day operations following the board’s strategic directions.​

• Member Meetings: Regular general meetings allow members to vote on significant issues and receive reports from leadership.​

Variations and Types

• Local Cooperatives: Operate within a limited geographical area, with individual members.​

• Regional and Federated Cooperatives: Serve broader areas, sometimes comprising multiple local cooperatives as members. Federated co-ops are owned by other cooperatives, while mixed cooperatives may have both individuals and co-ops as members.​

• Types by Function: These include worker co-ops (run by employees), consumer co-ops (run by users), producer co-ops, credit unions, and housing co-ops.​

Key Principles

The core cooperative principles are:

• Voluntary and open membership

• Democratic member control

• Economic participation by members

• Autonomy and independence

• Education and training for members

• Cooperation among cooperatives

• Concern for community​

This structure may make cooperatives especially responsive to the needs of their member-owners, fostering empowerment, local engagement, and balanced economic participation.

Perplexity