Sector body proposes additional changes to Co-operative Group governance

Co-operatives UK has put forward a number of changes to further enhance the governance of the Co-operative Group, following a report into the society’s democratic structure. The apex...

Co-operatives UK has put forward a number of changes to further enhance the governance of the Co-operative Group, following a report into the society’s democratic structure.

The apex body for co-operatives has published a report outlining some amendments to the proposals put forward by Lord Myners, who was appointed in December as an independent director of the Group to judge its governance.

Authored by secretary general Ed Mayo and secretary Helen Barber, alongside input from governance expert Johnston Birchall, the three recommendations, dubbed ‘Myners Plus’, address potential risks and draw on governance lessons from other co-operatives.

Co-operatives UK said it has always seen a real consensus around the need for change at the Group, and some of its changes include appointing member-representative professional non-executive directors to the main board.

The appointment of these directors, as opposed to the independent professional non-executive directors as proposed by Lord Myners, would be made in the majority by members of the national members council, rather than a sub-committee of the main board.

Co-operatives UK said the nominations committee should be a part of the NMC, rather than being controlled by the board. The NMC will house 50 directly elected co-operative democrats to have oversight of the main board, which is proposed to be made up of professional directors.

In addressing what a “member representative” is, the authors said that it is a “misunderstanding” of governance practice to say how many expert or lay members are on the board since ultimately directors are accountable to the members.

The authors added: “When people say they want to ensure that ‘co-operators’ are on the board, it is easy then for sceptics to read this as saying that they want to keep existing representatives in place rather than to disband. In truth, they ought to be saying something very different.

“A strong alignment with co-operative values is essential for every board director, as the Review recognises, and there can also be a form of expertise that may be needed, alongside professional business and retail strategy, financial and innovation skills, which is the ability to re-represent the interests of everyday members.”

Co-operatives UK also calls for one chair of the Group board and NMC, rather than the “cost and potential conflict” of having two chairs.

And its third addition to the Myners Review is for the social goals programme to be overseen by the Group board, rather than a separate activity run by the NMC. “Activity on social goals needs to be embedded in core operations, and become a source of commercial innovation,” says the authors, “rather than sitting as a separate exercise, as if it were a semi-detached corporate charitable trust.”

A statement from Co-operatives UK added: “The Myners Report is a clear signal that we are now moving from a period of ‘if’ into a period of ‘how’ the Co-operative Group can transform. An undoubted strength of the report is that it recognises that the organisation needs to become both more business-like and more co-operative.

“However, it is important to note that the governance needs of co-operatives will differ – a regional consumer co-operative will typically be structured in a different way to a national co-operative with many millions of members.”

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