Practical Issues for Large Consensus co-operative
I am working with a co-operative which is intending to have consensus decision making and therefore to have all co-op members as directors (unless there is a legal problem for the member).
They have raised some practical problems which I hope some co-operatives with long standing non-hierarchical structures have already dealt with:
'Also, that for banks and grant funders we are likely to have to undergo identity checks on all directors (and therefore all members). Do you know of other organisations that have used the model of all members being directors? We hope to have as many as 20 members so thinking about the practical implications of that. '
Can you help with whether this is a problem and, if it is, what workarounds have you developed?
Nathan Brown (Co-op Culture) Mon 18 Feb 2019 5:30PM
I got this response from FCA when investigating the issue for Housing Coops managed by General Meeting and an instance of a Company Director Disqualification Order being made. "If the person’s membership automatically and irrevocably makes them a director, and they are disqualified from being a director, then they can’t be a member. The CDDA doesn’t apply to membership, but it does to directorship. There would need a way for someone to be a member without being a director, potentially through a rule amendment if the rules currently provide that all members are the committee. "
John Atherton Mon 4 Feb 2019 9:57AM
Just echoing the point raised by others around "shadow Directors" it may not be an issue at the start but as they take on more new members there really need to sort the induction/training out so they realize they are proper Directors and have all the legal responsibilities of one. 20 is not too bad, but I don't think many of the larger ones other than Unicorn still go in for put all members/Directors.
Also a plug for http://www.sociocracyforall.org/book they make a subtle distinction between Consensus and Consent which is very helpful. Rather than everyone having to proactive agree to a decision, a decision is passed when no-one disagrees. Makes the burden of decision making that little bit easier.
Tom Lord Mon 4 Feb 2019 3:15PM
We have all directors at Aptivate, working by consensus. It's never
been a problem in our work. I've never experienced grant funders or
banks probing into our directors (although we don't get many grants,
a couple). My experience is that banks want to know about
guarantors, which isn't necessarily the same as directors. Feel free
to ping me for more info - [email protected]
Nathan Brown (Co-op Culture) Mon 18 Feb 2019 5:23PM
Be warned : If you agree to be a guarantor, you have effectively given up limited liability protection from the debts of the co-op
Tom Lord Thu 21 Feb 2019 9:37AM
We see it rather as the ability to access a temporary loan in case
of cashflow issues. International clients and projects with large
payment milestones can mean delays! Of course it means managing
risk. We don't treat the overdraft as free money that doesn't have
to be paid back, rather, as a pot we can choose to dip into if we
can see how we pay it back in the future.
Nathan Brown (Co-op Culture) Mon 4 Feb 2019 5:42PM
My experience of a 70 Member housing co-op (society not CLG) in which the General Meeting was our Committee of Management and therefore all Members were Directors (fun fun fun every year filling in the AR30 return): Bankers were only interested in signatories at the time, although that may have changed. In the instance where signatories were not deemed "fit" to be signatories (one by virtue of oustanding debts, another by virtue of having lived too far below the radar to exist on their system) we just removed them from the list of signatories/replaced them with others.
Dan Holden Mon 4 Feb 2019 5:56PM
Yep this sounds very much like Unicorn's experience as an 70-member, all director co-op. Not everyone is a signatory for the bank, I think there are ~10 which seems managable on both ends. Not aware of having had any particular problems but I don't deal with the admin of it, and issues would likely be confidential/sensitive. AR30 form is a hassle every year, but not insurmountable. At least in a housing co-op you can be fairly sure of people's addresses!
Nathan Brown (Co-op Culture) Mon 4 Feb 2019 5:58PM
Small mercies. It is usually up to the Member to keep their Society updated with their address. I know, i know... ;-)
James Alexander Kerr Tue 5 Feb 2019 2:06PM
From previous experience trying to set up a bank account for an approximately 12-member housing co-op with all members as account signatories: It may be easier to get the account set up with just a couple of names that you know will pass the security/credit checks and then add more signatories as and when convenient. The application was rejected a couple of times. And around half of our members were international, so we were rarely in the same place at the same time to sign paperwork.
Mark Simmonds (Co-op Culture) · Mon 4 Feb 2019 9:32AM
But if there is a legal reason they can't be a Director then they still can't legally participate in the collective governance, except in general meeting, as this would make them a de facto Director. The law defines a Director as "anyone who acts in the role of Director".