At the heart of the co-operative model is the idea of member participation – the idea that a business can be run with a focus on the interests of members; people who in one way or another are involved directly in the business. So, while good governance takes care and effort in any enterprise, however large or small, it has particular importance in a co-operative.
Some of the principles of good governance are the same as other organisations, including the accountability of a board to the owners, the role that a board has in directing but not managing activity, the duty a board has in relation to setting culture and values, managing risk… Other principles are unique to co-operatives, such as member voice, engagement and operating in accordance with the co-operative values and principles.
In drafting this code, Co-ops UK considered the UK Corporate Governance Code and the Wates Corporate Governance Principles – and applied those elements that apply to most organisations, while also ensuring that the code acknowledges the co-operative difference.
This code is a tool to help you chart what good practice can look like. It was first launched by Co-operatives UK in 1996 and it has evolved since then. This new iteration reflects
a twin focus on best practice in terms of democracy and the quality of leadership that emerges through good governance. For the first time, the code is applicable to all types and sizes of co-ops, although some may choose to use it differently to others. It offers a set of principles that all co-ops can reflect upon and use to encourage and enable good governance practice – operating on a comply or explain basis.