Worker co-operative structures
Differences between Governance and Management
In order to understand how decision-making power is delegated in various cooperative structures, it is necessary to understand the difference between governance and management. For more detailed information, please refer to the links available at the bottom of this page.
Governance refers to oversight and decision-making related to strategic direction, financial planning, and bylaws- the set of core policies that outline the organization's purpose, values, and structure. Governance decisions should provide guidelines for management. In most cooperatives, all members are empowered to run for and elect the governing body (often called the Board of Directors) and / or vote on certain governance decisions, such as changes to the bylaws.
Management refers to the routine decisions and administrative work related to the daily operations of the organization. Management decisions should support or implement goals and values defined by governing bodies (such as the Board of Directors) and documents (such as the bylaws). In some cooperatives, all members participate in the management. Organizations in which all members can become equal co-managers are called collecitves. In other cooperatives, one or more specialized managers make operational decisions. These managers are often elected by members or hired and supervised by the governing body (which is elected of and by the members).
The below are the types of structures with a brief description and a diagram. The diagrams attempt to illustrate governance and management relationships. For more diagrams and descriptions of different worker cooperative structures, see Part 2 of this educational resource.
Collectives are cooperatives in which all members may earn equal authority as co-managers. Governance and management can be difficult to separate, as all collective members typicall participate in both. Ideally, all collective members have clear roles both as members of the governing body (the whole collective often acts as the Board of Directors) and as co-managers. Management decisions may be made in full collective meetings, in teams or departments, or by individual co-managers.
Some larger cooperatives find it necessary to adopt a more complex decision-making structure. This may involve establishing a management hierarchy and / or a electing a representative governing body. However, some larger and well-established cooperatives maintain an egalitarian, if multifaceted, organizational structure. Rainbow Food Cooperative, for example, is a 200+ person worker-cooperative with an elected Board of Directors and departmental collectives. Rainbow in many ways resembles Suma, a UK cooperative described below. Some larger consumer-onwed grocery cooperatives, such asPeople's Food Co-op and Olympia Food Co-op, are collectively-managed. Portland Collecitve Housing is a two-household housing cooperative with an elected Board that is charged with implementing decisions made by the general membership.
Many cooperatives have a general manager, who is often elected or hired and supervised by the elected governing body. A general manager (or management teams) are charged with making operational decisions that honor and help to implement governance decisions made by the Board or the general membership.
Suma is the largest worker co-operative in the UK with around 130 employees. They operate on an equal pay basis and don't have a CEO or executive managers in the normal sense of the term. They are "multi-role," which means members work in a least two different "Function Areas" of the business. Suma is governed by periodic General Meetings for all the membership and an elected Board of Directors. The management is divided into "Function Areas," such as Buying, Warehouse, and Delivery. These Function Areas operate relatively autonomously. Each area has an elected "Functional Area Co-ordinator," who liaises with other the coordinators from other departments.
Mondragon is a large network of worker cooperatives in Spain. Mondragon has a conventional management hierarchy, although there are rules limiting pay disparities and most managers are trained and hired internally. Mondragon is a type of consortia, where its member cooperatives have their own bank, social security, education, research and development services. All in all, Mondragon consists of over 250 companies. Each individual company is semi-autonomous and may leave the Mondragon Group (and some have).