In an address at the Group’s annual general meeting, Co-operative Group chair Ursula Lidbetter called on elected members to take action over the future of the society.
Opening the Group’s AGM, Ms Lidbetter said it was “imperative” members install a sustainable framework since the current “governance structure has let us down” and acknowledged that “2013 was a disaster waiting to happen”.
She said: “It was the lowest point in our history, with a real financial banking crisis. It was a year of crisis in what should have been a year of celebration with our 150 year anniversary.”
In describing a year that saw the former Co-operative Bank chair Paul Flowers arrested on drugs allegations and a number of leaks that led to the resignation of chief executive Euan Sutherland, Ms Lidbetter said the society was “savaged in a way that few other UK businesses faced”.
The loss of £2.5bn was also “one of the worst in UK corporate history … half of our assets, accumulated over 150 years, have been destroyed”.
The chair told delegates: “My hope is that at this AGM we now start to turn our fortunes around and set this society firmly on the road to long term recovery.”
If delegates do not act, they will set themselves up for “future failure”, according to Ms Lidbetter. “I recognise the emotional stages people go through: Shock and denial, anger and blame, and finally understanding and acceptance of what needs to happen. We have been shocked and angry.”
She said the process for governance reform had not been ideal, and had not been helped by board leaks. “We cannot endlessly debate this. Our members and customers are asking us to put our house in order.”
It is also not just shoppers that care. Ms Lidbetter said that because of the level of debt at the society that the banks have more of a say over the business than “any one of us here”.
“This is the beginning of the debate,” she said. “We want you to help shape the future. Over the last year we have been a sorry sight for anyone who cares about co-operation. We have let them down and owe them an apology.”
In letting down both its 90,000 employees and eight million members, Ms Lidbetter said the governance structure had failed.
In a call to delegates to accept change, Ms Lidbetter concluded: “The difference between all of us in this room, is that we – and only we – have the power and responsibility to do something about it. We are the people – and the only people – who can make good this mess. We can restore profitability. It’s imperative we retain that passion for our heart. Let’s create the future together today.”