Rochdale Principles

The Rochdale Principles are a set of ideals for the operation of cooperatives. They were first set out in 1844 by the Rochdale Society of Equitable Pioneers in Rochdale, England, and have formed the basis for the principles on which co-operatives around the world continue to operate. The implications of the Rochdale Principles are a focus of study in co-operative economics. The original Rochdale Principles were officially adopted by the International Cooperative Alliance (ICA) in 1937 as the Rochdale Principles of Co-operation. Updated versions of the principles were adopted by the ICA in 1966 as the Co-operative Principles and in 1995 as part of the Statement on the Co-operative Identity.[1]

Current ICA version of co-operative principles

The Rochdale Principles, according to the 1995 ICA revision, can be summarised as follows.[2]

Voluntary and open membership

Member economic participation

Member economic participation is one of the defining features of co-operative societies, and constitutes the third Rochdale Principle in the ICA's Statement on the Co-operative Identity. According to the ICA, co-operatives are enterprises in which "Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes: developing their co-operative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co-operative; and supporting other activities approved by the membership." This principle, in turn, can be broken down into a number of constituent parts.

Democratic control

The first part of this principle states that "Members contribute equitably to, and democratically control, the capital of their co-operative. At least part of that capital is usually the common property of the co-operative."[2] This enshrines democratic control over the co-operative, and how its capital is used.

Limitations on member compensation and appropriate use of surpluses

The second part of the principle deals with how members are compensated for funds invested in a co-operative, and how surpluses should be used. Unlike for-profit corporations, co-operatives are a form of social enterprise. Given this, there are at least three purposes for which surplus funds can be used, or distributed, by a co-operative.[2]

"Members usually receive limited compensation, if any, on capital subscribed as a condition of membership."
"Developing their co-operative, possibly by setting up reserves, part of which at least would be indivisible;" in other words, the surplus can be reinvested in the co-operative.
"Benefiting members in proportion to their transactions with the co-operative;" for example, a consumers' co-operative may decide to pay dividends based on purchases (or a 'divvi').
"Supporting other activities approved by the membership."

Rochdale Principles

Current ICA version of co-operative principles

Voluntary and open membership

Anti-discrimination

Motivations and rewards

Anti-discrimination

Motivations and rewards

Democratic member control

Member economic participation

Democratic control

Limitations on member compensation and appropriate use of surpluses

Democratic control

Limitations on member compensation and appropriate use of surpluses

Autonomy and independence

Education, training, and information

Cooperation among cooperatives

Concern for community

Previous versions

Original version (adopted 1937)

ICA revision (1966)

See also

External links

References