The Legal Nature of Cooperative Membership

Abstract

Membership is one of the core structural characteristics of the cooperative form. It distinguishes cooperatives from other business forms, especially companies. Cooperative membership is often regulated in national laws; however, the question of how membership should be translated into legal rules, has been largely unexplored. This is quite unfortunate, since to fully understand the complex relation between the cooperative and its members-and the mutual purpose of the cooperative-one must study the legal nature of cooperative membership. The purpose of this article is to investigate the legal dimensions of cooperative membership and how cooperatives differ from mainstream companies. The analysis is structured so that first the distinctive normative features of cooperative membership are assessed on a general level. Next, the focus shifts to the members' rights and obligations with the aim to provide a systematic overview regarding their justification and structure. Finally, the question of how cooperative membership should be regulated de lege ferenda, is briefly discussed. The findings of this article suggest that when translating membership into legal rules, special attention should be paid to the cooperative identity. It is particularly important to distinguish membership from shareholdership and to understand the central role of the members as user-owners of the enterprise. The purpose of the cooperative is based on member participation and without such interaction, cooperatives would ultimately lose their true identity. This article also points out several membership-related issues, which require further attention, and such studies are necessary to determine how cooperative law should be developed in the future.

Platform cooperatives and the dilemmas of platform worker‐member participation

“…Unpacking this further, it has been argued that corporate platforms are like Möbius strips, co‐opting assets from other businesses, the state, and users to the extent that distinguishing assets that are external or internal to the firm becomes almost meaningless (Watkins and Stark, 2018). Yet, for all worker cooperatives, the distinction between inside and outside—transactions with members versus transactions with non‐members—is vital, if worker cooperatives are to continue to be for the benefit of members (Pönkä, 2018). Corporate platforms strive to achieve indirect network effects by increasing and decreasing the supply of platform workers so that consumers have a ready supply of workers to choose from (Gawer 2021), and while platform cooperatives also need to generate indirect network effects, the conditions on obtaining membership of a cooperative and the interest in ensuring platform worker‐members' have a sufficient income makes it difficult to dynamically adjust the platform worker‐member side of the platform.…”

Cooperative Membership and Strategizing in a Korean Consumer Cooperative Network: The Case of iCOOP

“…The comparative advantages of member-owned business arise from ownership, control and benefit (Birchall, 2012;; thus, membership is a critical competency of cooperatives. Cooperative researchers have continuously studied membership (Pönkä, 2018), and even in documents advocating cooperatives, membership is used as an essential discourse resource to emphasize differences from other viewpoints and approaches (ICA, 2020). A distinctive feature of membership as an organizational competency is democratic control by members.…”

Reconceptualizing and Improving Member Participation in Large Cooperatives: Insights from Deliberative Democracy and Deliberative Mini-Publics

“…In addition to being legally required in many contexts, it is also often seen as a practical necessity in light of the challenges, costs, and impracticalities of relying solely on direct democracy to make decisions when the size of the membership increases (Cornforth, 1995;Greenberg, 1984;Varman & Chakrabarti, 2004). However, significant concerns have been raised about how electoral representation in large cooperatives can result in low levels of substantive representation (the degree to which representatives further the interests of those they represent, Pitkin, 1967) and descriptive representation (the degree to which representatives share the same characteristics as those they represent, Pitkin, 1967) of the broader membership, and how it can create divisions and distinctions between members and their representatives (Barros & Michaud, 2020;Basterretxea et al, 2020;Kokkinidis, 2012;Pek, 2021).…”