Co-op News (August 2019)

shift the initial losses from workers to investors
– and in exchange, give a share of the profits to
them when they become profitable,” he says. These
shares would be ‘traded’ on a ‘Coop Exchange’.
“We have spoken with co-operative lawyers
to address questions raised and make sure the
legislation around investor shares is watertight
while remaining true to the co-operative principles.
And other co-operatives are on board too, from
worker co-ops and retail societies up to the ICA.”
Stephen gave a presentation on Coop Exchange
to the ICA board in June. “Ben Reid introduced
the agenda point and explained his role in the
organisation,” he said, “and we demonstrated
how Coop Exchange addresses many of the calls to
action in the ICA’s own official documents.”
These documents include The Capital Conundrum
for Co-operatives paper (2016) and the Survey of
Co-operative Capital (2015), which said: “Nonvoting
shares can be used to preserve member
democratic control while creating one or more
classes of shares that can attract member or nonmember
investment.” The document went on to
predict a mechanism similar to the one proposed by
Coop Exchange: “With advancing technology, this
can be easily provided through an online platform,
creating a private electronic marketplace.”
The ICA’s Blueprint for a Co-operative Decade
also highlights that co-ops need capital if they are
to be established, grow and flourish – and that the
end aim should be secure reliable co-operative
capital while guaranteeing member control.
Stephen adds: “The ICA was very receptive to
the idea, and agreed to create a working group
to fully evaluate Coop Exchange under the ICA
audit committee. We hope the audit committee will
report back to the board at the General Assembly in
Rwanda in October.”
Coop Exchange is itself a co-operative, based
in Malta, and takes a small commission from
investments above a certain threshold. To put Coop
Exchange into practice, it has built an app. “Unlike
any other co-operative financial institution, the
app allows participation across time and space,
from everywhere in the world at any time of the
day, with a few clicks,” says Stephen.
“At the end of the day, we want an economic
system where stakeholders can democratically
hold accountable those who make decisions
affecting them.
“We want to turn business from a force that
suppresses democracy into a force that supports
it, and we want the internet to be a space where
users own the value they create, instead of being
products that are sold. Our mission is to beat the 1%
at their own game and do so in a way that changes
the rules by making it fair for the 99%.”
DAME
PAULINE
GREEN
[Former MEP, president
of the ICA, And Secretary
general of Co-operatives UK]
HOW DID YOU GET INVOLVED
IN COOP EXCHANGE?
I met Stephen in Malta – I’m a Maltese citizen and was
already doing work with the Maltese co-op movement. One
of the key issues during my presidency of the ICA was how
to secure capital for existing, and start up co-ops, so Coop
Exchange was immediately of interest to me. I am now on
the board.
WHY DO YOU BELIEVE IN THIS PROJECT?
Because for both new and existing co-operatives, finding
the capital to grow is hard. Managing the tension between
finding investors and ensuring the rights of member-owners
aren’t eroded is a balance, and many co-ops around the
world have foundered when they haven’t got that balance
right. All co-ops struggle with this. How do you make sure
someone putting money into a co-op doesn’t remove
members’ right to decide? I firmly believe the development
of Coop Exchange is a significant opportunity to find
a way to ease that tension.
WHAT ARE THE CHALLENGES IN MAKING IT A REALITY?
The challenge is making sure the co-op movement knows
what Coop Exchange is and understands it. I’m really
delighted to have a chance to help with that.
The issue of capital will always be a dilemma, but Coop
Exchange addresses this. It’s a modern, clever, innovative,
digital approach that keeps co-op ownership in the hands
of members while allowing a co-op itself to raise capital
and grow. It’s a great project and product and Stephen
himself is committed and determined. He believes he can
make a contribution to co-op growth – and to poverty
reduction too, as it is also a way of supporting working
people to invest small amounts in co-ops, giving them
a return that will enable them to grow their own incomes.
u Find out more at WWW.COOP.EXCHANGE
AUGUST 2019 | 45