Purpose of co-ops and mutuals

The point of a co-operative or mutual is different from mainstream investor owned businesses. It is focused on delivering its mission to its members, rather than maximising return to investor shareholders through profit distribution and capital growth.

Because the co-operative business purpose is different, these firms behave differently, pursuing business plans that aim to secure long term success for their members.  As a result, they positively affect the markets in which they operate, often by restricting the profit taking of investor owned firms that must compete with them.

Where there is a proper alignment between the products and services and the interests of the member owners of the co-operative or mutual, this way of doing business works well. With good management it is efficient, with no leakage of value from the business, and provides a systemic advantage over investor owned firms.

It is a different way of doing business – with a different purpose.