The FairShares Model is a brand and concept advanced by The FairShares Association to assist the creation of FairShares Enterprises. At the heart of the brand is a definition of social enterprise established by Social Enterprise Europe Ltd based on:
- Specifying the social purpose(s) and evaluating the social impact(s) of trading activities;
- Conducting ethical reviews of product/service choices and production/consumption practices;
- Promoting socialised and democratic ownership, governance and management by primary stakeholders.
Central to the brand is the FairShares approach to power and wealth sharing through organisation design and intellectual property management.
Brand Principles (Values and Principles)
The brand can be used by FairShares companies, co-operatives, partnerships, associations, and by consultancies and educators to communicate:
- wealth and power sharing with primary stakeholders - A FairShares enterprise structures itself as a company, co-operative, association or partnership that advances equality and equity between members, stakeholder groups and trading partners. Any wealth created is shared fairly amongst founders, producers, users and investors to promote mutuality and reciprocity. It does this in several ways - through membership rights; through issuing shares (in companies and co-operatives); through creating funds that directors, workers and users can each decide how should be spent. This inclusive approach encourages participatory management and governance that spreads decision-making to all primary stakeholders and gives them a voice in the decisions that affect the future of their joint enterprise.
- specification of social purpose(s) and auditing of social impact(s) - The members of a FairShares enterprise are empowered by the constitution to establish social goals (such as specific improvements to their own, their community’s and the wider environment’s health and well-being). The achievement of these goals can be reviewed through social auditing (provided for within model FairShares constitutions). Social auditing is a process for checking with stakeholders whether the economic, social and environmental outcomes desired are being achieved, and for deciding what to do if they are not.
- ethical review of the choice of goods/services offered - The managers and members of a FairShares enterprise are encouraged to think carefully about the well-being that their joint enterprise creates (or could create) through designing and offering products and services. In short, there is a commitment to creating goods/services that are good for people, society and the environment (a triple-bottom line outcome). If it is not possible to create products and services that improve well-being, then it should trigger debate on whether to stop production.
- ethical review of production and retailing processes - The managers and users of a FairShares enterprise’s products and services are encouraged to consider how the process of production and retailing affects members, society and the environment. In short, there is a commitment to producing and retailing the goods/services in a way that enhances the well-being of the stakeholders who produce and consume them. If it is not possible to produce or consume in a way that advances well-being and/or reduces environmental impact then debates should take place on whether to stop production or adopt alternative production / consumption practices.
- a social democratic model for the ownership, governance and management of capital - A FairShares enterprise seeks to extend ownership amongst all primary stakeholders directly affected by its operations (founders, producers, users and investors) so that they have a clear right to participate in decisions on how capital is managed. ‘Capital’ within a FairShares enterprise is understood to include natural capital (resources provided by nature – e.g. air, water and minerals), economic capital (machinery and premises), social capital (networks of people), human capital (workers’ energy, skills and abilities), intellectual capital (workers’ ideas and designs), and financial capital (contributions of money). The goal of the model is to compensate the providers of each type of capital fairly and equitably.
Levels of Alignment
We have designed a FairShares Information System. Within this, we propose three levels of alignment with the FairShares Values and Principles:
- Level 1 - an enterprise actively disseminates the FairShares Model, but there is little evidence that the Brand Principles are applied to itself.
- Level 2 - an enterprise actively supports use of the FairShares Model and implements the Brand Principles using proprietory / alternative design principles.
- Level 3 - an enterprise actively supports use of the FairShares Model and puts them into practice by adopting (and adapting) FairShares IP and/or one of our model constitutions.
On Ownership, Governance and Management
A Level 2 / 3 Compliant FairShares association / company / co-operative society / consultancy or educator will:
- recognise founder members and enfranchise them through Founder Shares (or equivalent share/member type)
- recognise providers of Labour and enfranchise them through Labour Shares (or equivalent share/member type)
- recognise users/customers and enfranchise them through User Shares (or equivalent share/member type)
- recognise creators and providers of financial capital and enfranchise them through Investor Shares (or equivalent).
You can find out more about when, why and how each type of share is issued using the following two documents:
On Intellectual Property (IP)
A Level 3 Compliant FairShares Enterprise will:
- give individual and group recognition to members who create IP
- agree a Creative Commons licence for the use of members' IP
- prevent the transfer of IP ownership from members to the Company or Co-op Society except where this is the express wish of the IP creator(s).
- manage members IP as an Intellectual Commons (on behalf of members)
- A Level 2/3 FairShares solidarity enterprise also issues Labour Shares, User Shares and Investor Shares (under Company Law)
- A Level 2/3 FairShares solidarity co-operative also issues Labour Shares, User Shares and Investor Shares (under Co-operative or Society Law)
- A Level 2/3 FairShares solidarity association offers membership to Labour Members and User Members (under Association, Company or Charity Law).
- A Level 2/3 FairShares solidarity partnership offers membership to Labour Members and User Members (under Partnership Law).
- A Level 2/3 FairShares employee-owned company also issues Labour Shares and Investor Shares (under Company Law)
- A Level 2/3 FairShares worker co-operative also issues Labour Shares and Investor Shares (under Co-operative or Society Law)
- A Level 2/3 FairShares labour association offers membership to Labour Members (under Association, Company or Charity Law).
- A Level 2/3 FairShares labour partnership offers membership to Labour Members (under Partnership Law).
- A Level 2/3 FairShares user-owned company issues User Shares and Investor Shares (under Company Law)
- A Level 2/3 FairShares user co-operative issues User Shares and Investor Shares (under Co-operative or Society Law)
- A Level 2/3 FairShares user association offers membership to User Members (under Association, Company or Charity Law).
- A Level 2/3 FairShares user partnership offers membership to User Members (under Partnership Law).
If neither Labour nor User membership/shares are issued on an open membership basis, the enterprise does not conform to Level 2 or 3 of the FairShares Brand, but may still qualify as Level 1 compliant.
Logos for printed and electronic use are available in PNG, JPG and SVG formats.
Brand Value and Auditing
To use this brand, a FairShares Enterprise should have convincing answers to the following six questions during a social audit:
1. What are the purposes of your enterprise (network)? 2. What values and principles guide the choice of goods/services offered? 3. Who are your primary (secondary and tertiary) stakeholders? 4. How can you configure the ownership, governance and management systems to distribute wealth and power to all primary stakeholders? 5. What values and principles guide production and consumption? 6. How are social, environmental and economic impacts reviewed?
Creative Commons Licencing
© FairShares Association Ltd, 2017, Creative Commons 4.0: Attribution, Share Alike
All variants and adaptations of FairShares Model V2.x should acknowledge the FairShares Association using the above copyright notice, and new adaptations must carry the same Creative Commons licence. Discussion of the FairShares Model itself should acknowledge the work of Rory Ridley-Duff and Cliff Southcombe. For information on FairShares V1.1 or V1.2, please contact the FairShares Association for access to our archives.