Editorial: How many members does it take to run a co-op?

An example of member power was exercised recently at the Heart of England Co-op. Three hundred members turned up for a special meeting to call on the board...

An example of member power was exercised recently at the Heart of England Co-op.

Three hundred members turned up for a special meeting to call on the board to stop and review department outlet closures. The society had previously announced the closure of its non-food division due to financial pressure across the stores.

The members successfully passed a motion that called for the closures to stop, and to review what happened in the run-up to the announcement of the division’s closure. It also passed a motion of no confidence in the board.

Heart of England Co-op's former department store in Coventry [photograph: Coventry Telegraph]
Heart of England Co-op’s former department store in Coventry [photograph: Coventry Telegraph]
It boils down to one point: the lack of consultation with employees and members. At the meeting, some staff said they felt the closure announcement was sudden, and had not been consulted.

Likewise, members are saying that consultation with members was needed too. Quite rightly, they point out that, as members, they own the society, and thus its assets. But this is a quandary that has been seen elsewhere over the years with other co-ops, where commercial sensitivity trumps member consultation.

It’s an ongoing debate between two sides: the management, who are managing a business and want to exit a sector at the most favourable commercial cost; and the members, who believe thorough consultation is needed when making a decision that impacts its owners.

At the special meeting, the Heart of England board reiterated that it cannot fully share details of the financial and competition pressures due to reasons of commercial sensitivity. Members were also reminded that the board comprises fellow members – who were elected to represent the interest of the membership as a whole.

For a large consumer co-operative, though, it’s difficult for members to have a direct say and direct access to information

The board released a statement after the meeting – which was not open to members of the press – that said as members, they too have found this process “extremely difficult”. Those director members would have also signed confidentiality agreements to stop any disclosure.

So, it opens up the debate about how closely members should be involved with the running of their co-operative. It’s important that co-ops do consult with members about changes – and this can be done without revealing any commercial information.

But it may be easier, and more democratic, to operate a simple process to ensure members are given opportunities to feed into how businesses are run and to share ideas with the management in transparent ways. Of course, members have to want to be involved in this stage, for it to work.

For a large consumer co-operative, though, it’s difficult for members to have a direct say and direct access to information. As we’ve seen at the Co-operative Group, when a co-operative reaches a particular size in its life, it has to take commercial sensitivity seriously – but when this kicks in, new ways of involving members as much as possible should also be sought.

It’s a taboo subject that is always up for discussion. And it’s one we’ll be exploring over the coming months.

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