The basic structure of a co-operative is what fundamentally distinguishes it most from other forms of business and societies, and is why they are so much more responsive to the needs of communities.
A co-operative has members, and those members have a direct say in how their co-operative develops, the products and services the co-op sells, and the prices that are charged. They do this by way of their of their voting power and control over the co-op's Board of Directors.
Below is the basic structure of a co-operative, however variations on this model are common. For instance, a co-op may be so small that all of its members are on the Board of Director or, in the case of a small workers' co-op, there may be no need for a management level. Another aspect of worker co-ops is that members occupy all levels of the strucure, whereas that may not be the case with other types of co-op.
The structure shown above works like this:
Members collectively elect the Board of Directors, and may individually stand for election themselves.
The Board of Directors is responsible for governing the co-op, which includes setting its direction and hiring senior management (for instance, the Executive Director, CEO, etc.).
The Board is accountable to the membership, and reports to them on an annual basis at a minimum.
Senior management is responsible for operating the co-op, which includes hiring staff, program/business development, administration, etc.Senior management is accountable to the Board, and reports to the Directors at board meetings.
The language of "membership" has become commonplace in the businessworld, but membership in a co-operative should not be confused with "membership" in some sort of price club.
A membership sold by a company is just a product that profits a company owned by other people. It may grant you access to lower prices or promotional deals but, ultimately, your business profits someone else.
Membership in a co-op means you own the company together with other people in your community. With co-op membership you may gain access to lower prices and promotional deals as well, but you also have a say in how the co-op is run including the values that guide its operation, and your business profits you and your community.
Also, the membership you pay for when you join a co-op is refundable to you when you leave. Depending on the co-op, a refund of your share purchase may include interest, in addition to the amount you originally paid.