Critics of the Co-operative Group’s governance reform have outlined the problems with proposals, but what changes must the organisation make to stay true to its roots? Co-operative business adviser Jo Bird lists some of the essential features:
- To seek and gain consent from the International Co-operative Alliance to use the name co-operative or co-op.
- A clear purpose for the benefit of its members, as agreed by members. For example: “The society exists in order to serve its members by carrying on business as a co-operative in accordance with co-operative values and principles.”
- Membership is open to all who are regular customers of the society and invest an agreed minimum amount of shares.
- Members may exercise their right to invest more than the minimum shares in the society, on a one member, one vote basis – not one share, one vote. Preferably up to the statutory limit of £100,000.
- A clear list of decisions that may only be taken by a general meeting or referendum of the wider membership. For example, acquisitions, disposals, loans entered into, additional share offers – all above a certain threshold.
- At least 10% of individual members need to vote in society elections or referendum, for the result to be valid. For example, if there are 2.5 million individual members who are regular customers, a quorum would need to be 250,000 members. This isn’t far from 222,222 votes in last year’s Group elections.
- A nominations committee needs a majority to be composed of elected members. It would use transparent and non-elitist criteria to assess and endorse competency for the role of director. Any candidate rejected by the committee would have the right of appeal to an elected members body and/or the wider membership, for example through election.
- The ICA states: “Co-operatives are democratic organisations controlled by their members.” Therefore a majority of all directors need to be elected by the membership, in contested elections.
- Gaps in board skills and experience are filled by competent independent non-executive directors, who must not form the majority of directors. For example, a Board of 11 could have 6 member elected directors, 3 INEDs and 2 executive directors.
- The interests of regional societies need to be represented in a way that is acceptable to at least two thirds of regional societies, by trade with the society.
- Increased freedom of information with members. For example, members’ right to view a register of director’s interests, and voting record of each director, multiple channels of communication with directors.
- Co-op Dividend. The power to distribute part of annual profit as dividend to members, in proportion to purchases from the society.
- Common ownership to discourage personal gain from demutualisation. For example, upon winding up, any residual assets should go to another common ownership society in membership of Co-operatives UK.
• Jo Bird is an adviser with Co-operative Business Consultants and co-organiser of this year’s Ways Forward conferences, which brought together activists to discuss the failings at the Co-operative Group. This article is a summary of a full article from the CBC website.
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