With a revamped democratic structure, the Co-operative Group will be closer to its members, according to Lord Myners.
In the his interim report of his review of the Group’s co-operative governance, Lord Myners said the organisation suffers from a “democratic deficit”. He added: “Ordinary members have surprisingly weak constitutional rights and limited ability to influence the Co-operative Group’s social mission and activities to reflect their interests and values.”
He also added that power has been taken away from the Group’s eight million members and given to just 100 regional board members. “Ordinary members have very little power,” he said, “and I recognise that, aside from the influence of corporate members from the independent societies, the future of my recommendations lies in the hands of around 100 elected individuals on the current Group and Regional Boards, few of whom have any serious business experience and many of whom are drawing material financial benefits from their positions.”
The current structure of the Group consists of a main board, seven regional boards and 48 area committees, including a members’ council for Northern Ireland.
Area committees monitor local trading performance and make recommendations to develop local business, and each member receives over £2,100 for this. When elected to a regional board, members receive an extra £4,300, and have a wider remit including reviewing management proposals for regional expenditure and monitoring sales and profitability of the core trading operations.
“Members need to be told the truth,” says Lord Myners:
In his draft recommendations, Lord Myners proposes a model that will create a national members council (NMC) of 100 members who will hold a new management board to account, while the co-operative’s eight million members will directly elect the board each year.
He wants to increase connections with members. He asked: “How do we enhance connectivity between members and the national membership council, and the board of directors? The business side of the Co-op needs to be under the supervision of people who can understand the issues, the Group needs to be run in accordance with time honoured values and principles.
“The responsibility for ensuring that it is managed in accordance with those values and principles will lie with the national members council as will the responsibility for ensuring those values and principles remain current and relevant.
“Finally, the national members council will be responsible for the social programme, the giving, the community interest etc… because this is playing to the strengths of the different groups.”
Lord Myners said a challenge to overcome is how to arrange the elections to the NMC. “Is it a single national constituency, or is it regional constituencies, first past the post?” he asked. The answers to these challenges will be released in his forthcoming full report in mid-April.
The current area committee and regional board structure will be “subsumed within this broader democratic body”, according to Lord Myners’s proposals. Though he said: “For business reasons it is very important we maintain area groupings around individual stores or clusters of stores in order to inform our decision making about those stores. This is something Tesco won’t do, Tesco don’t listen to their customers apart from what their customers do at the checkout point. The Co-op does listen to its customers.”
Questioning the current role of area committees, Lord Myners said: “I’d also ask the area committees, do you feel your voice is actually heard? Can you point to meaningful things that have happened as a result of your area committee’s work? And I sort of suspect that a lot of area committees are listened to, but will say ‘our views get lost in the complexity above us’.”
Speaking of his interim preview of his mid-April Phase One report into the Group’s governance he said: “What I assure you is that I will prove to you that the NMC is not some sop, not some talking shop that has no power, I’ve talked about transparent and open engagement.
“The NMC will have an absolute voice on distribution, and will be charged with meeting with the directors and ensuring the directors fully understand co-op values and principles.”
For further updates, information and analysis, view the full Myners Review collection