It is the biggest secret that everyone knew: there is a governance problem at the Co-operative Group.
Two of largest inquires into the state of the society have both concluded that governance is in dire need of change. (It’s not, of course, just governance that caused the co-op’s problems.)
This is not new news to any co-operator – many have noticed a democratic deficit in the Group. Especially when it comes to direct accountability to members.
But it’s important to take a levelled view of the reports from Lord Myners and Sir Christopher Kelly and not be taken into a tailspin of media sensationalism over “amateur directors”.
Yes, serious failure has happened. But as chair Ursula Lidbetter said in a recent web chat with members, it isn’t the fault of any one individual. A whole culture needs stirring up and mixed back together in a more co-operative fashion.
The answer, according to Lord Myners, is to install a number of professional directors – meaning qualified people from similar-sized businesses.
Co-operatives UK has tackled this suggestion and highlighted the risk of allowing a board to be self-selecting. Instead its secretary general Ed Mayo and others call for the nominations committee, responsible for selecting ‘qualified directors’ to be dominated by members of the national members council. This council will initially be made up of regional board directors and is likely to contain the more ardent co-operative supporters.
But in its response to the Myners Review, Co-operatives UK shoots down the red herring of whether co-operators or professionals are at the helm of multi-billion-pound business.
In the eyes of the authors, those saying they want co-operators on the board should be saying something different. A strong belief in co-operative values is essential, but a form of expertise is also needed.
Here is where Co-operatives UK want members to be directly accountable for selecting board candidates. Within days of this report being published, Lord Myners said this is “tantamount to a wrecking amendment”.
He believes it is only the Group board directors who have the level of competence to objectively select those with the skills and knowledge. But in having NMC members on the committee, this will build up a level of trust to dissipate the “them and us” attitude between directors and employees.
Whether it is Myners Plus or Myners Minus, the gates have been opened for debate on reform of the Co-operative Group.
At the Co-operative Group’s annual meeting on 17 May, delegates signed off on the motion for reform – it is now time to look at the two investigations into the society and debate the future. One would hope the Group develops a very open and participative forum for debate with all members.