The RISE co-op is the sole shareholder in the Social Enterprise Mark CIC and its members have been called to an Extraordinary General Meeting during the lunch break of next Tuesday’s “Knowing and Growing” conference at UWE Bristol. The RISE board has proposed Four Special Resolutions that would dissolve the co-op and transfer all assets as windfalls to the SEM CIC and a trust, ignoring RISE Ltd’s Memorandum of Association. software.coop is calling on other RISE members to attend the EGM and oppose this demutualisation attempt. Update: dissolved but not demutualised (see below). Update 2: new vote called (see below).
RISE is constituted as a common ownership co-op and its Memorandum of Association contains a clause that directs the assets to be transferred to another common ownership social enterprise organisation if the co-operative is dissolved. However, unlike the CIC asset lock, there is no independent regulator enforcing it and, unlike in many co-ops, there has been no requirement for new members to pledge to obey the RISE common ownership clause at an individual level and there has been no member education about common ownership in the last three years.
This demutualisation is the wrong solution for RISE because:
- it has recieved much public money and money from members on the understanding that it would be kept in common ownership;
- there are common ownership social enterprises that could really benefit from the legacy assets at this time of budget cuts, but if those assets go to a CIC, they are lost from common ownership;
- the EGM is the day after the global launch of the United Nations International Year of Co-operatives, which is about promoting mutualism around the world and the RISE co-operative should support this;
- many RISE members are mutuals, including the world’s largest consumer co-operative and demutualisation would be embarassing to them;
- demutualisation should be discussed seriously, through a proper democratic process before the regular Annual General Meeting, not sprung from the board to members in a short meeting during the lunch break of another event;
- the proposal has not been published on RISE’s website or email newsletter;
- appointing the former directors of a dissolved co-op as trustees without member oversight seems unlikely to secure the assets in the long term.
software.coop will vote against the demutualisation, in favour of social enterprise, and calls on other RISE members to show solidarity with the co-operative and common ownership social enterprise movements.
Update 2 November: rise has announced its dissolution but they’ve got to “give further consideration” to where the assets go because the demutualisation resolutions were defeated. I fear that they’ll still try some way to bail out the Social Enterprise Mark despite the rejection, but I hope they’ll do the right thing and give the assets to good common ownership social enterprise like the RISE Memorandum of Association requires.
Update 10 November: We got another “Dear Member” letter today, dated 7 Nov, saying “there are two key issues to be resolved” (which is rubbish because the Memorandum offers a default – I think the board just hates that clause) and that there will be a new postal vote that will run from 18 November to 5 December.