The primary mandate of co uncil of directors of a worker cooperative is to manage and control the company’s management in order to meet the best interests of members workers who collectively own. In fact the board of directors of a worker cooperative has the same type of services as a private company share capital, that is to say, to ensure that the company serves the best interests its owners.
But as a private company, this means ensuring that the company generates the most profits possible to pay shareholders dividends to the owners by the highest possible action, it is otherwise in a workers’ cooperative.
Understanding the rebate
In a cooperative, whatsoever, profits, called rather surplus to distinguish them belong to their members and must be distributed in proportion to their use of the cooperative. This is why there pays dividends and not dividends. Members receive a discount of their cooperative, not as an owner-shareholders but as owner-users. Indeed, once again, whatever the type of cooperative, surpluses are distributed proportionally among the members for economic use they have made of their cooperative, that is to say, in proportion to the commercial transactions that they have done with it.
In a consumer cooperative, such as a co-op store, surpluses are thus considered « surplus » of the cooperative members to their buyers. The cooperative so gives them these overpayments proportion to the volume of each purchase. This is sort of a refund to members. If I bought for $ 10,000 products my cooperative, I therefore entitled to ten times rebates that the member who is bought for $ 1,000.
In a cooperative of producers such as AGROPUR an agricultural cooperative, the surplus is considered « not-quite-paid » to members when the cooperative bought their agricultural products. The rebate is then considered as an additional purchase price of these products.
In a worker cooperative, as the surplus is theoretically considered also as « not-quite-paid » when the cooperative members paid their salaries. That said, in practice, a work cooperative must manage its financial costs, including payroll, so as to maximize its competitiveness on the market. This is why the rebate is not actually a complement of wages but rather an income supplement paid to members. This additional income annually varies profitability of the cooperative, that is to say, according to the level of surplus that it was able to achieve during a fiscal year. This is somehow a form of productivity bonus.
The four dimensions of cooperative advantage in a worker cooperative
Cooperative advantage of a member of a labor union is not limited to touching additional income in the form of annual bonuses. Certainly maximize work income of its members is the fundamental reason for being a work cooperative, but this reason for being is also reflected in the fact to protect the employment of members of their guarantee job security. One could even say that prior to maximize employment income, it is first to protect these jobs. Therefore, the board of directors of a worker cooperative must every year with the help of general management, propose a method of disposal of the annual surplus that can both protect the jobs of members and to provide them with the best possible employment income. They must always arbitrate between these two requirements can be contradictory. Indeed, protect jobs today is to ensure that the company maintains a good growth rate. Is investing in its development. This means using part of the surplus for the investments necessary for the protection of members’ jobs, so do not pay any surplus dividends to members, but only a part.
Maximize the benefit of cooperative members of a cooperative of workers and means managing the first cooperative in the long term (protection of employment) rather than the short term (best employment income). It was here that manifests both the wisdom and the recipe for success of worker cooperatives. This success is built on the long term. It is built year after year on a solid foundation. It is built on the confidence of workers to their cooperative know that it is here to stay, it will allow them to live and better support their families.
Furthermore, the cooperative advantage of a Member worker should not be limited to the first two dimensions, even if they are essential. It should also demonstrate two other points, quality of work life and the opportunity to grow through work. It is also no coincidence that worker cooperatives have been pioneers in the field of human resources management. The fact that they always emphasize the primacy of the individual capital is one of the fundamental characteristics that differentiate cooperatives private companies for which it is rather the rule of capital on the person. In the case of a worker cooperative, it means the rule of the worker, that is to say:
ensure maximize their quality of life at work (working conditions, safety, security, etc.);
and to ensure, but this is unfortunately not always possible, that members can find a human enrichment staff about their work. (Job enrichment, participatory management, internal promotion opportunities, etc.).
Alain Bridault, President, ORION cooperative research and consulting