A system and a method for automatically creating and operating a functional association of multiple luminaires is proposed. The system consists of two or more devices that each contain one or more sensors, logic processing circuitry and communication circuitry that is able to transmit messages between devices. The set of devices that constitute the members of a functional association is selected from a larger set of candidate devices. The selection process involves each device comparing the sensor data received from neighbouring devices relating to occupancy and daylight sensors against the device's occupancy and daylight sensor data.