The co-operatives of the MONDRAGON Corporation are constituted in accordance with the general regulations for co-operative companies, which means that their basic structure is similar to that of other co-operatives.
However, in addition to being subject to the law that specifies the external regulations which govern all co-operatives, MONDRAGON co-operatives also have two additional basic internal organisational elements: their Company Statutes, which constitute the true Magna Carter of the organisation, and their Internal Regulations, which specify the way in which the Statutes are to be implemented and developed.
Figures and Bodies
The following is a list of the most important Figures and Bodies in the MONDRAGON co-operatives:
- The member. Members must complete a trial period in their jobs, generally lasting between six months and one year, after which, as co-operative members, they are free either to confirm or reject the offer of permanent membership.
- The Co-operative. Based on a system of shared management, the co-operatives constitute the basic elements of MONDRAGON. Each retains its own organisational structure, individual legal personality and independence.
- Support Co-operatives. The result of an association of grass roots co-operatives, their aim is to support the co-operatives in specific areas of management. Known also as ‘co-operative co-operatives’, they also have their own members (their own workforce) and encompass the following fields: financial, welfare, training and research.
- Divisions and Subgroups. Associations constituted within the framework of MONDRAGON between co-operatives operating in the same area, with the aim of taking advantage of certain common services and economies of scale. They co-ordinate the management of their respective co-operatives in accordance with their own individual strategic framework.
- General Assembly. The supreme body of the co-operative and a vehicle for expressing the social will of the members.
- MONDRAGON Co-operative Congress. The aim of the Congress is to establish the strategic criteria by which the Corporation is to be administered, through the planning and co-ordination of its business units. It is comprised by 650 members delegated by the various co-operatives.
- Governing Council. This is the body which represents and governs the co-operative. Its members are elected by the General Assembly.
- Management Council. The body which co-ordinates the functions of the management team and advises the Governing Council. It is made up by the general manager and the executive members.
- Management. The executive management team of the co-operative, appointed by the Governing Council.
- Social Council. The body which represents the members to the co-operative’s internal institutions. The number of members on the board is established in accordance with the total number of members in the co-operative.
- Monitoring Commission. Auditors appointed to ensure correct compliance with accounting principles and any other areas which require their consideration.
- Capital Contributions. Upon joining the co-operative, members make a contribution to the share capital. The General Assembly establishes the corresponding figure on an annual basis.
- Variable Share Capital. The share capital may vary for a number of different reasons including: revaluation of returns (profits), interest on contributions or payments made as a result of members leaving. This is a common characteristic of co-operative legislation.
- Advance Payments. Monthly payments made to members in return for their services, as an advance on the co-operative profits. The advance is divided into the ‘consumer advance’, paid directly to the members, and the ‘welfare advance’, which is paid into the social support fund.
- Distribution of Net Surplus and Losses. Once the profit and loss statement has been prepared and all taxes have been deducted, the net surplus or loss is divided into three sections earmarked for the social funds, the reserve fund and the dividends (or negative dividends).
- Co-operative Dividends. Amount received by each member as his/her share of the net annual profits. This figure increases the amount of capital each member has invested in the co-operative.
- Pooling of Profits. All the co-operatives earmark part of their net surplus for redistribution, as a genuine expression of solidarity within the framework of MONDRAGON.
- Central Inter-cooperation Fund. Used for funding business initiatives which, due to their size or risk factor, are beyond the means of the co-operatives or groups involved.