The 7 Cooperative Principles

The seven cooperative principles are the guidelines by which cooperatives put their values into practice. They were first developed by the Rochdale Society of Equitable Pioneers in 1844 and have been updated by the International Cooperative Alliance (ICA) to reflect the modern cooperative movement.

The current version was adopted at the ICA's centenary congress in Manchester in 1995 and is published in full on the ICA's cooperative identity page. They apply to all genuine cooperatives globally, regardless of sector or size.

Principle 1: Voluntary and Open Membership

"Cooperatives are voluntary organisations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination."

What this means in practice:

Anyone who can use the cooperative's services should be able to join
No discrimination based on personal characteristics
Membership cannot be compelled — it must be a free choice
Members who are no longer able to use the services can withdraw

Example: A food cooperative cannot refuse membership to someone because of their political views. An agricultural cooperative cannot restrict membership to one ethnic group.

The flip side: Voluntary also means members can leave. Cooperatives cannot legally or practically trap members.

Principle 2: Democratic Member Control

"Cooperatives are democratic organisations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary cooperatives members have equal voting rights (one member, one vote) and cooperatives at other levels are also organised in a democratic manner."

What this means in practice:

Every member gets one vote — regardless of how much capital they contribute
Elected directors are accountable to the membership, not to external investors
Major decisions require member approval

One member, one vote vs shareholder voting: In a corporation, voting power is proportional to share ownership — a 51% shareholder controls the company. In a cooperative, the largest contributor and the smallest contributor each have exactly one vote. This prevents the concentration of power and keeps the cooperative serving all members, not just the wealthy ones.

Example: In a credit union with 50,000 members, each member — from the retiree with $200 in savings to the business with $2 million — casts one equal vote in board elections.

Principle 3: Member Economic Participation

"Members contribute equitably to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. 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 cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership."

What this means in practice:

Members invest in their cooperative (joining fees, share purchases, retained surpluses)
Capital earns limited return — the cooperative is not a vehicle for investors to extract profit
Surpluses are distributed to members in proportion to use, not in proportion to capital invested

The patronage dividend: When a food cooperative has a good year, the surplus is returned to members based on how much they spent at the store — not based on whether they bought more shares. This is called a patronage refund or rebate.

Example: A member who spent $5,000 at a food co-op in a year might receive a 5% patronage rebate ($250) when the cooperative distributes its surplus.

Principle 4: Autonomy and Independence

"Cooperatives are autonomous, self-help organisations controlled by their members. If they enter into agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy."

What this means in practice:

Cooperatives must not become controlled by external bodies — governments, corporations, or investors
When accepting external funding (grants, loans, investment), terms must preserve member control
Cooperative identity must be maintained even in partnerships

Why this matters: Many cooperatives receive government grants or partner with corporations. This principle requires that such arrangements never compromise democratic governance or the cooperative's ability to serve members.

Example: An agricultural cooperative that accepts government grant funding cannot allow the government to dictate its pricing policies or membership rules.

Principle 5: Education, Training, and Information

"Cooperatives provide education and training for their members, elected representatives, managers and employees so they can contribute effectively to the development of their cooperatives. They inform the general public — particularly young people and opinion leaders — about the nature and benefits of cooperation."

What this means in practice:

Cooperatives invest in educating their members about cooperative governance
Directors and managers receive training in cooperative principles and business skills
Cooperatives have an obligation to explain the cooperative model to the wider public

Why this matters: Democratic control only works if members understand how to participate. A cooperative where members don't know how to use their vote is not genuinely democratic.

Example: The UK Co-op Group runs an annual member meeting and publishes extensive reports explaining its governance. Many agricultural cooperatives run training programmes for member farmers.

Principle 6: Cooperation Among Cooperatives

"Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures."

What this means in practice:

Cooperatives should support and trade with other cooperatives where possible
National and international cooperative organisations provide infrastructure
Cooperatives share knowledge, resources, and advocacy

Structures built on this principle:

The International Cooperative Alliance (ICA) — the global body for the cooperative movement
National cooperative federations (e.g., NCBA CLUSA in the US, Co-operatives UK)
Cooperative financial networks (credit unions sharing ATM networks, for example)

Example: Agricultural cooperatives often form second-tier federations — individual farmers join local cooperatives, which in turn join regional federations that have greater negotiating power with processors and retailers.

Principle 7: Concern for Community

"Cooperatives work for the sustainable economic, social, and cultural development of their communities through policies approved by their members."

What this means in practice:

Cooperatives should benefit the communities in which they operate, not just their members
Environmental sustainability is increasingly understood as part of this principle
Cooperatives resist relocating or closing simply for financial advantage to members

Why this differs from CSR: Corporate Corporate Social Responsibility (CSR) is optional and external to the business mission. For cooperatives, community concern is a core operating principle — not an add-on. See the cooperative governance article for how these principles translate into governance structures.

Example: When a rural electric cooperative considers upgrading its grid, it must weigh not only cost to members but the impact on the community — including economic development, environmental impact, and access for low-income households.

The Cooperative Values Behind the Principles

The seven principles are expressions of a deeper set of values:

Self-help — cooperatives help people help themselves
Self-responsibility — members are responsible for their cooperative
Democracy — decisions are made collectively
Equality — members have equal standing
Equity — members are treated fairly
Solidarity — mutual support among members
Honesty — transparent governance and reporting
Openness — information is shared with members
Social responsibility — concern beyond the immediate membership
Caring for others — the cooperative tradition of mutual aid

The Rochdale Principles: Where They Came From

The modern principles trace back to the Rochdale Society of Equitable Pioneers, founded in 1844 in Rochdale, England. A group of 28 weavers, facing poverty and poor-quality food sold by company stores, pooled £28 to open their own cooperative store.

Their original principles included:

Open membership
Democratic control (one member, one vote)
Distribution of surplus to members in proportion to trade
Limited interest on capital
Political and religious neutrality
Cash trading
Promotion of education

These remain recognisable in today's seven principles — updated for a global, 21st-century cooperative sector but grounded in the same fundamental insight: people can improve their lives by working together.

Read the full history →

Why the Principles Matter Practically

Not all organisations that call themselves cooperatives actually follow these principles. An organisation that:

Restricts membership to a select group
Gives wealthy members more voting power
Extracts profits primarily for outside investors
Is controlled by a government or corporation

...is not a genuine cooperative, regardless of what it calls itself.

The ICA principles serve as a certification standard — they are what distinguishes a genuine cooperative from a business that simply uses the word for marketing purposes.

Related articles:

The 7 Cooperative Principles — ICA Guidelines Explained