Co-op Law
Resources for Worker Cooperatives
Co-op Law
Resources for Worker Cooperatives

Cooperative Decision-making

Making decisions in cooperatives can be a uniquely difficult task. There is always a diverse range of member interests, and decisions must be made in a fair and democratic manner. Before deciding what sort of decision-making process your cooperative will have, it is important to first distinguish between the types of decisions your organization will be facing.

Distinctions and Definitions: Governance & Management, Routine & Emergent

Governance vs. Management Decisions

  • Governance: the strategic task of setting the organization’s goals, directions, limitations, and accountability frameworks
  • Management: the allocation of resources and overseeing the day-to-day operations of the organization
 

Routine vs. Non-programmed Decisions

  • Strategic Decisions: affect the long-term strategy and goals of the business
  • Tactical Decisions: focus on medium-term goals, push towards longer-term strategy
  • Operational Decisions: shorter-term, build toward long-term goals 
You must decide which category each of your decisions fall into, and which administrative or governing body is equipped to make those decisions. Not each of these decisions should be made by the entire membership, or even the Board of Directors.

Examples of Decision-Making Processes: Consensus

The consensus process (shown in the chart) is one of the most popular governance options for cooperatives. Consensus does not require an unanimous decision, but requires everyone in the group to commit to common goals.

The Bay Area Arizmendi bakeries are governed by consensual decision-making, although they will hold a 75% majority vote if a decision is time sensitive and consensus cannot be reached. It is also very important to define what constitutes a “block” or objection for your cooperative. Is it simply that a member disagrees with the proposal or does a block require a higher threshold than personal opinion, e.g. that the proposal is harming or moving the cooperative backward.

Pros:

  • All members of the group are heard, and their concerns are taken into account
  • Decisions are often better, and more complex
  • Group unity and cohesion is improved, and nobody is left behind

Cons:

  • Meetings can be long and inefficient
  • The loudest members of the group might get an unfair amount of resources/time
  • The organization might fall into a “business as usual” trap when the membership is too afraid of endangering their jobs to make needed change
 

Examples of Decision-Making Processes: Representative Decision-Making

Not all cooperatives make their decisions by general consensus; many have an elected body that makes decisions on behalf of the cooperative. For example, Wisconsin’s Viroqua Food Coop is run primarily by its board of directors. This seven-person board meets monthly, and even has the power to call sessions that are closed to the membership. 

Pros:

  • Efficient executive legislative body
  • Sense of democracy and inclusion

Cons:

  • Executives can be corrupt and inefficient
  • Minorities are often underrepresented in governance

Related articles

Choosing your Approach to Cooperative Governance

Subhead in sentence case Default body text. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nulla orci augue, auctor eu feugiat ac, molestie sed erat. Nulla facilisi. Etiam quis gravida leo. Nam vitae condimentum eros. Pellentesque a fermentum elit, id pulvinar lacus. A basic hyperlink within the text. Morbi odio nunc, hendrerit et dapibus vel,

KEEP READING »

Maintaining Accountability in a Cooperative

Accountability refers to the ability of an organization or person to follow through, to make sure everyone does what they say they are going to do. A “system of accountability” is a transparent set of policies and practices that enables members of a co-op or group to hold each other accountable for tasks, and behavior. It

KEEP READING »

Classifying Roles in a Cooperative

It is critically important to evaluate the question of employment status carefully. Failure to properly classify someone as an employee could result in an expensive lawsuit or fine when either a labor department or worker decides to call out an actual employment relationship. This is especially true when converting a business to a worker-owned cooperative.

KEEP READING »