THE Corporate Governance Review Group is half-way to establishing a new voluntary corporate governance code for use across different types of co-operatives.
The group was established last year by Co-operatives UK because it felt that the current code was "in need of serious development".
An interim report from the review group was presented to delegates at Congress by Adrian Coles (pictured), chair of the group and Director General of the Building Societies Association.
The report said: "Whilst the co-operative sector has not had recent experience of governance failures of the magnitude of those at WorldCom or Parmalat, being seen to conform to high standards of corporate governance is now more important than it has ever been."
Mr Coles said: "The primary purposes of the new code are further to enhance and promote openness, transparency, probity and the success of co-operative businesses. The review group endorses these values as the basis of all its work."
The key issues it is looking at include membership; the board's responsibilties; and director appraisal.
Mr Coles told Congress the review group's belief is that governance of co-operative societies should come from the membership. As member owned organisations, he said, the membership must be at the core of all co-operative governance work.
The group has been investigating ways for members to be more engaged with the society. These included looking at extended voting opportunities through postal, telephone and electronic voting and to provide the right information to involve more members.
Speaking of the co-operative board the review group believes it has five key responsibilities, which are:
? Co-operative ethos to make sure the society abides by its principles
? Strategy to ensure obligations to the membership are met
? Monitoring the success of the co-op by directing and supervising its affairs
? Assessing and managing the co-op's risk factor
? Ensuring the necessary financial and human resoruces are in place for the co-op to meet its objectives.
A detailled questionnaire sent to directors found that only 14 per cent of retail directors have had personal performance reviews, with the performance of the board as an entity being reviewed annually in only about a third of cases.
Out of the 680 questionnaires sent to directors from different co-operatives 35 per cent were returned ? with the majority being consumer co-operatives.
At a workshop Chris Braithwaite from CBA Marketing Research provided detailed analysis of the results saying there is a high satisfaction, of around 70 – 80 per cent, of co-operative directors.
However, they realise they could be more effective if they had more time to prepare for meetings; training in legal and financial matters; and a better understanding of the business.
He discovered that worker co-op directors were the most keen for training in such areas as legal responsibilities; legislation and the law; and financial management, but they were unclear of where to get training.
Some consumer co-op boards thought they were weak when compared to senior management and felt they did not have enough strength to challenge decisions.
When it came to confidence issues consumer co-operatives had the most confidence when challenging decisions and make comments. Worker co-operatives' directors said they had little confidence when opposing chief executive decisions.
In this article
- Adrian Coles
- British co-operative movement
- Co-operatives UK
- Company Founded
- Consumers' cooperative
- Corporate governance
- Musselburgh and Fisherrow Co-operative Society
- Social Issues
- The Co-operative brand
- The Co-operative Group
- THE Corporate Governance Review Group
- Worker cooperative