(1) Cooperatives are directed and controlled by or on behalf of their members, who have ultimate democratic control through their governance system.

(2) Cooperative governance reflects their jointly-owned, democratically controlled and autonomous nature. It facilitates operation based on universally recognised cooperative values and principles, including cooperative social responsibility.

(3) The governance organs of a cooperative are structured to pursue economic activities mainly in the interest of their cooperator members. In general interest cooperatives, they are structured to pursue such activities mainly in the general interest of the community.

(4) Cooperative governance structures may vary according to:

(5) Cooperative governance structures must always ensure cooperative autonomy and member control.

COMMENTARY

The chapter opens in Principles of European Cooperative Law (PECOL) 2.1(1) with a statement about the centrality of the role of members in cooperatives and the importance of ensuring that cooperatives are ultimately controlled by their members, even if functions and powers are divided among a number of organs such as boards and managers. PECOL 2.1(5) focuses specifically on the role of governance structures in upholding the autonomy of the cooperative and member control. Cooperative groups and subsidiaries are dealt with at PECOL 5.2.

PECOL 2.1(1) also defines‘governance’ as being concerned with the direction and control of the jointly owned autonomous cooperative enterprise. The core concept of democratic control of cooperatives is emphasised in most of the national laws studied. These principles of governance are important in both cooperatives operating in the interests of their members and those pursuing the general interest. In the case of GICs, democratic governance is perhaps the main feature identifying the organisation as a cooperative.

PECOL 2.1(2) then places cooperative governance in the context of the overall International Co-operative Alliance (ICA)/International Labour Organization (ILO) definition of a cooperative. It links the specifics of governance to the values embodied in the ICA definition. They are both operational (self-responsibility, democracy, equality, equity and solidarity) and ethical. The principle of cooperation among cooperatives is also included.