Eight Cooperative Principles
The operating foundation of credit unions and other cooperatives throughout the world are guided by a list of essential cooperative principles. The origins of which were first envisioned in 1844 by a group of weavers in Rochdale, England, and continue to grow and evolve to meet the movement, its members and communities of today.
From very modest means and difficult circumstances, the 28 founders of the Rochdale Society of Equitable Pioneers came together to solve a pressing community need – access to affordable, healthy food. Their efforts not only helped the Pioneers feed their families, but forged seven operating principles that were formally adopted in 1937 by the International Co-operative Alliance and used as a blueprint worldwide among cooperatives.
Today, an exciting conversation is taking place around an Eighth Cooperative Principle for credit unions. Envisioned by Local Government FCU and Civic FCU CEO Maurice Smith in 2019, the Eighth Cooperative Principle commits credit unions to an unambiguous focus on Diversity, Equity and Inclusion (DEI). The principle was formally adopted by the US credit union movement in 2019.
In February 2022, Piedmont Advantage's Board of Directors unanimously adopted a resolution in support of an 8th Cooperative Principle. “Special thanks to our Diversity and Inclusion Committee for their engagement and collaboration on this important moment in Piedmont Advantage’s history,” said President / CEO Dion Williams.
The Eight Cooperative Principles
Principle One: Voluntary and open membership. Credit unions are voluntary, not-for profit financial cooperatives, offering affordable financial solutions to those eligible and willing to accept the responsibilities and benefits of membership, without discrimination
Principle Two: Democratic member control. Credit unions are democratic organizations owned and controlled by their members, with equal opportunity for participation in setting policies and making decisions. Therefore, each member has one vote.
Principle Three: Member economic participation. Members are the owners of credit unions. As such, they contribute to the capital of their credit union and directly impact its financial success. Members realize benefits in proportion to their relationship with their credit union and use of its products and services.
Principle Four: Autonomy and independence. Credit unions are independent, self-reliant organizations controlled by their member-owners, not outside stockholders. Credit unions entering into agreements with other organizations must ensure continued democratic control by the members
Principle Five: Education, training, and information. Credit unions educate and train members, employees and volunteers so they can contribute effectively to the development of the credit union. In addition, credit unions provide financial education for their members and the public.
Principle Six: Cooperation among cooperatives. Credit unions serve their members most effectively and strengthen the cooperative principles by working with other cooperatives through local, state, regional, national, and international structures.
Principle Seven: Concern for community. Credit unions work for the sustainable development of communities through policies developed and accepted by the members. Credit unions seek to achieve a greater good through responsible corporate citizenship.
Principle Eight: Diversity, Equity and Inclusion. Cooperatives believe we are stronger when a proactive effort is put forth to engage everyone in governance, management and representation.