A mutual is a business owned by its customers, its employees, or producers.
They are defined and structured by their purpose to provide goods and services to members on an equitable basis. Mutuals can choose to share the advantage of not having to deliver shareholder returns by delivering higher service levels, lower pricing, or rebates. Mutuals pre-distribute profits, rather than profit-maximise, which is in line with the basic principle that no member can benefit more than is proportional to their involvement in the organisation.
All co-operatives and mutuals choose a constitution that operates on the basis of one member one vote. Governance can either be direct, with all economic participants qualifying as members, or indirect, with proxy representation of stakeholder interests. The level of active engagement by members will depend on the type of co-operative or mutual and the level of engagement required.