In this post, we’re sharing our rules of engagement: our cooperative bylaws. In enacting the bylaws, we had to appoint an interim board and create a plan for board elections. This was the next step after filing our Articles of Incorporation, a tax ID for the co-op (EIN), and opening a bank account.
The bylaws are the “laws” of an organization: the rules of engagement and governance. Every kind of organization has these laws, whether a non-profit, business, or cooperative.
As a cooperative, the task of writing our bylaws was simply a matter of taking the outline and spirit from our community-designed Ownership Model Canvas, and turning it into a legal document that meets Oregon and federal law.
We undertook this work using seed money from Start.coop with our attorney Alix Devendra of Aligned Law. Aligned Law is a member of the Cooperative Development Network and Alix is a Legal Fellow with the Sustainable Economies Law Center (SELC). We also had guidance from Greg Brodsky and Carmen Perkins at Start.coop as part of our coaching sessions in the Spring 2023 incubator program.
The task force who undertook this work for the co-op are five of the most long-term and/or deeply engaged volunteers. All have a role of responsibility as a “team lead” in our Sociocracy chart, and are personally committed to the values and principles of our co-op and the 7 cooperative principles.
We are proud of the final result. There’s not too much jargon and it’s not overly long: about 10 pages. Most of it is straightforward or standard according to cooperative traditions, the law, or our own Ownership Model Canvas. But a few issues came up that are worth explaining:
“Each member shall own one and only one share of membership stock.”Section 2.02
This sounds simple, but actually got a little complicated with a multi-stakeholder co-op.
In practice, it means each membership is one tax ID, and the same tax ID cannot be used on multiple memberships.
So, for example, an artisan’s LLC business can be an Artisan member with their business tax ID number (such as an EIN), which may have one or more persons involved. And the artisan herself could be a Supporter member with her individual tax ID number (such as a Social Security number). The person could theoretically have two votes, one as a business decision maker and one as a person, under each membership.
In another example, note that a membership does not limit the number of stores one could have: if an artisan has three different stores, each with a different product focus, and they are all run under the same tax ID, they are all one membership.
Unincorporated collectives and mutual aid societies
“A member other than a natural person may be represented by a natural person as a duly designated agent for such member under such written authorization as may be prescribed by, and filed with, the Cooperative. Any such person, while so acting in such representative capacity, shall be entitled to have and to exercise all rights, privileges and authority of membership in the Cooperative, including the right to hold office as a director. Such representative person shall be an officer, director, partner, member, associate or manager of such member other than a natural person.”Section 2.03
We specifically wanted to allow membership for collectives and mutual aid societies without legal incorporation to lower the barriers to entry. This language allows for that by designating one individual and their individual tax ID as the representative member.
“(a) Each member is entitled to one vote with respect to a matter that is subject to a vote at any member meeting. Members may not vote by proxy.
(b) For decisions other than the election of directors, voting shall be weighted by class (except as otherwise provided by law, by the Articles of Incorporation or these Bylaws). Artisan member votes will be weighted 44%, and supporter and worker member votes will be weighted 28%. The option with the highest total weighted vote count across all classes shall be deemed adopted.
(c) The election of directors shall be by class (artisan, supporter, and worker) and for each seat shall be decided by a plurality of the votes cast by the members of that class.”Section 4.07
“One-member-one-vote” also got a little complicated with a multi-stakeholder cooperative. Each stakeholder group is expected to have a very different number of members: very few Staff, lots of Artisans, and possibly many more Supporters than Artisans. If that’s true, a simple one-member-one-vote would mean, for example, that Staff would be outvoted every single time and would not have much of a voice.
The intention of our co-op is for the primary beneficiary to be Artisans. However, the reason we designed a multi-stakeholder co-op is for the other important stakeholders (Supporters and Staff) to have real influence.
That means that while Artisans must be given extra weight in some cases to make up for their numbers, they must also be able to be outvoted. This was supported by a case study we reviewed of a photography co-op that limited its membership to only a certain number of photographers. The staff wanted to increase the number of photographers to have a more successful business: greater product selection would attract more customers. But the photographers didn’t want to have more competition so they voted against it. This both prevented newer photographers from becoming cooperative owners and reduced their own client base. What was in the photographers’ short-term best interest may not have been in their long-term best interest. That’s why stakeholder voices are important for balance and need to have enough power to be able to sway a decision.
To keep the spirit of the Ownership Model in the voting, we had to structure our one-member-one-vote in three different ways: a simple vote on issues at meetings, weighted by member class on votes by the entire membership (proportionally to their Board representation: 3/7 for Artisans and 2/7 each for Supporters and Staff), and restricted to class for board elections.
Board of “Directors”
“…the board of directors of the Cooperative (the “Board”)”Section 1.01
One of our community members on Discord requested that we consider Board of Delegates or Board of Representatives as a name instead. This was discussed with the lawyer and our advisor during drafting. A “delegate” had too little power to function appropriately in a representative democracy. A “representative” was an acceptable alternative, but ultimately the task force voted to keep the name traditional as Board of Directors as the most common and understood terminology.
As a matter of practicality, a self-appointed group of volunteers had to create this organization, incorporate the co-op and enact the bylaws. The five members of the volunteer task force are thus the Interim Board of Directors. They know the bylaws the best and were present during the community design process.
The elected Board of Directors will be seven (3 Artisans, 2 Supporters, and 2 Staff) but we do not currently have any staff. If we still do not have staff at the first election, then two staff “representative” positions will be voted as directors: one will be voted for by Artisans and one by Supporters, with the express purpose that those persons represent the interests of future staff on the board.
The first board elections have been set for January 2024. The reasons for this date are purely practical:
- We are working urgently towards an ambitious deadline: our October launch. We don’t want to change out the people leading the work, midway through the work.
- The current group is working well together and gaining trust, background, skills, and momentum.
- We also don’t want to change leadership during the critical launch in October, and the two months that follow are the busy holiday season. During that time, artisans will be otherwise occupied with the seasonal rush and the co-op needs to maintain focus on the holiday buying imperative.
January is thus the first perfect time: after the holiday rush, after the marketplace has launched, and during a time of year that is usually on the slow side for artisan sales.
Our interim board directors are (in alphabetical order):
- Elizabeth (she/her). Elizabeth (“Lizzy”) is a jack of all trades, master of none at crafting and in life, picking up skills here and there following her neurodivergent brain. She is currently focused on fiber arts; specifically crochet, knitting, and embroidery. She and her husband opened their store in February of 2023 but she has been selling off and on since 2010. You can find her current wares at DragonTree Emporium with more items being added in seasonally.
- Erin (she/her). Erin (she/her) found her niche as a full-time potter, of Stella NC Works after 22 years in personnel roles in the US Army and as a third-party corporate recruiter / small business owner. She finds satisfaction in her extremely hands-on process, endless experimental possibilities where science and art intersect, and exploration of natural and human values in her work.
- Olga (she/her). Olga is a data nerd studying worker cooperatives by day and a hatmaker by night! She loves sewing almost anything but specializes in 5 and 6 panel hats in her shop, Bean Bros Handmade.
- Thera (she/her). Miss Thera is an Educator, Artist and Playwright as well as a passionate neurodiversity advocate. Her shop Atypically Artistic is her safe place to express herself freely without the confines of neurotypical expectations. She is also a Marketing and Communications Director and Consultant and loves the creativity that goes into communicating beyond words. She has worked with multiple non-profits over the past decade as an administrator and board director and is thrilled to be bringing her experience and knowledge to the team.
- Valerie (she/her). Valerie has over 20 years professional experience as a non-profit director, event planner, project manager for multi-million dollar renewable energy projects, and most importantly, 14 years running a full-time artisan business as one-half of the husband-and-wife leathercrafting business, Walnut Studiolo. She is also a freelance writer. Find her on Medium or LinkedIn.
In accordance with Oregon law, the bylaws specify that the Board must self-select three officer roles. We are a more dynamic group than these roles suggest: we operate as a sociocracy not a hierarchy. Everyone in the General Circle, and all of the Board of Directors, are equally critical to our success. The officers are:
- President: Olga
- Secretary: Erin
- Treasurer: Valerie
Do you have any questions about the bylaws or the board? Let us know your thoughts in the comments below!
About Artisans Cooperative
We are growing an online handmade marketplace for an inclusive network of creatives: a co-op alternative to Etsy.
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