The effectiveness of a co-operative director depends in large part on them having an understanding of the various governance terms that arise when performing their duties.

In 2002, CDS published the Australian Co-operative Glossary to provide co-operative directors with an alphabetical reference of over 570 co-operative, financial, business and human resources terms that they are likely to encounter while fulfilling their governance duties.

The following is an extract from the glossary of co-operative and related definitions that are commonly used in Australia. Email CDS to purchase the latest edition of this essential resource.

INDEX

Active member
Cardinal stakeholder group
Community buyout
Community enterprise
Consumer co-operative
Co-operative
Co-operative company
Co-operative principles
Co-operative values
Co-operatives Act
Corporation
Member
Mutual
Mutuality principle
Non trading co-operative
Primary activity
Private enterprise
Registrar of Co-operatives
Social enterprise
Trading co-operative

Active member

An active member is a person who maintains a relationship with a co-operative, either by purchasing or supplying goods or services, paying an annual subscription (non trading co-operatives only), or having another form of relationship such as having a child enrolled at a child care co-operative or being a tenant of a housing co-operative. Once a member ceases to be active in accordance with the co-operative's rules, the members' membership is cancelled.

Cardinal stakeholder group

The group that a business or an organisation was established to serve. In a for-profit company for example, the cardinal stakeholder group are its investor owners. In contrast, the cardinal stakeholder group of a co-operative are the users of its services, whether they be small businesses, consumers, parents or tenants.

Community enterprise

A community enterprise is a business that is owned, controlled and used by the people who live in a defined locality. Membership of a community enterprise is voluntary and open to the general public. A community enterprise is a sustainable organisation that does not rely on charitable donations or government grants or subsidies for its continued existence. Most community enterprises in Australia are incorporated as co-operatives. Click here for links to Australian co-operatives that operate as community enterprises.

Community buyout

A community buyout occurs when members of the public purchase an existing business that is threatened with closure. In Australia, community buyouts usually occur in small rural communities where the business threatened with closure provides an essential service such as a general store, petrol station or hotel. A community buyout usually results in the formation of a community enterprise incorporated as a co-operative.

Consumer co-operative

A consumer co-operative is a business that aggregates the purchasing power of individuals and families to provide cheaper prices for goods and services and/or to obtain goods and services that would otherwise be unavailable. Consumer co-operatives can either operate as a community enterprise or a buying group among individuals with a common need.

Co-operative

A co-operative is a type of business that is owned and controlled by the persons who use the services provided by the co-operative. In Australia, a co-operative is a corporation registered under state or territory co-operatives legislation.

Co-operative company

A company that is structured as a co-operative. Some large agricultural co-operatives in the Australian state of Victoria are incorporated as companies because they were formed before Victoria's first co-operatives legislation in 1953.

Co-operative principles

The co-operative principles are a set of seven principles adopted by the International Co-operative Alliance in 1995 to guide co-operative practice around the world. The principles form the basis of co-operatives legislation in Australia.

Co-operative values

A co-operative is based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. Self help, expressed through mutual action as a group, provides the motivation for self reliance and assuming responsibility for taking control of one's own affairs. Democracy and equity sustain the solidarity of the group by ensuring that no individual member can secure power or gain advantage at the detriment of other members.

Co-operatives Act

An act of a Australian state or territory parliament that regulates non financial co-operatives. Click here for links to the various state and territory Co-operatives Acts.

Corporation

A corporation is a legal entity that has an existence separate from the persons who are its members. A corporation has the legal capacity of a natural person (a human being), and has the power to hold property, enter into contracts, and sue and be sued in its corporate name. A corporation is also described as an incorporated body, a corporate body or a body corporate. Companies, co-operatives and incorporated associations are all corporations.

Member

A member is a term used to describe a legal owner of a co-operative. Members are also referred to as shareholders in co-operatives with shares.

Mutual

A mutual is an organisation where there is a complete identity between the participants in the enterprise and its members, and where the entity's income is derived from members. More

Mutuality principle

For an organisation where members contribute and pool their money to achieve a common purpose, their contributions (including payments for services) are excluded as assessable income to the organisation. The principle is that assessable income must be derived by outside parties (a person cannot make a profit out of himself or herself). The receipt of surplus funds by a member is merely returning the recipient's own funds to themselves.

Non trading co-operative

An Australian 'not-for-profit' co-operative that can be formed with or without shares. While a non trading co-operative can conduct commercial activities, it is prohibited under law to distribute surplus funds to members from profits or upon winding up. This type of co-operative is commonly used to provide social, cultural and recreation services. More

Primary activity

The primary activity of a co-operative is generally related to the main purpose of a co-operative, and is used as the basis for determining whether or not a member is an active member. All co-operatives must have at least one primary activity.

Private enterprise

A private enterprise is a business or an organisation whose records are not open to the public, and includes proprietary limited companies, co-operatives and incorporated associations.

Registrar of Co-operatives

The Registrar of Co-operatives is a statutory officer created under Australian co-operatives legislation who is charged with the responsiblily for the administration of the legislation. The Registrar is usually is a senior state/territory government official. Click here for contact details of Australian Co-operative Registrars.

Social enterprise

A social enterprise is a not-for-profit organisation that aims to enhance the social well being of individuals and families. Most social enterprises provide services to a disadvantaged group in the community such as indigenous people, the unemployed, persons with disabilites or the elderly. A social enterprise usually relies on government funding and/or charitable donations for its continued existence.

In Australia, most social enterprises are registered as either a company limited by guarantee or an incorporated association. Co-operatives are prominent in indigenous, housing and children's services. Click here for links to Australian co-operatives that operate as social enterprises.

Trading co-operative