The outcome of the Co-operative Group special meeting in support of governance reform surprised a few people, not least perhaps, the media. Surely this was a business pulling itself apart? How could a co-operative society which seemed divided on how to proceed have come so readily to a unanimous view on a statement of intent?
Given the hostile and often intemperate comments of Lord Myners – and his dismissive comments about “well-meaning” area committee members – how could anything that leads us in the direction of his proposals have won such overwhelming support?
We should not have been surprised. No one in the movement (with the exception of the Group board) disagrees with the Myners analysis, although we wish he had found a more professional way of expressing it. The board has managed to lose a bank and should have been sacked; the Myners proposals mean the board will go swiftly and that is something we can all welcome.
The best thing about the SGM result is that we all now know exactly what we are agreed upon. For a start, we agree that we want the Group to be a co-operative, and that we should adopt measures to prevent demutualisation.
We want the society to be controlled by a competent board and accept that there will have to be a mechanism, such as a nominations committee, to ensure we achieve this.
We agree on the need for direct elections at all levels and, by extension, we agree on the need to have all major decisions approved democratically and transparently by the membership. The society’s political links come to mind in this regard, as does executive pay and pricing policy. In a co-operative, the members are sovereign.
In practice, we need a mechanism to hold the board to account, and the proposed National Membership Council must deliver accountability – although we may continue to debate its final format.
So what must happen to achieve a similar result at the special general meeting in September? The answer is that we need a principled compromise. We should consider the proposals of Co-operatives UK.
The National Membership Council should appoint the nominations committee rather than allow the board to effectively appoint itself.
We should have one chair or president of both the board and the council, ensuring that person has the confidence of both. Let us, by all means, have an eminent person who has not had a great association with the movement, but it must be one who shares our values.
Crucially, in my view – and this goes beyond the Co-operatives UK proposals – the number of members duly approved by the nominations committee must be greater than the number of seats on the board. Anything else is not democratic nor co-operative.
Co-operatives UK is calling for social goals to be led by the board and integrated into operational plans. Some of us have spent too many years at meetings watching members try to pin managers down on operational matters. Managers will always win such arguments and, because they do, they have taken control of policy. Arguments about local sourcing are a good example of managers taking an “it can’t be done” approach. Elected members should take control of policy and demand that managers devise the operational means to achieve policy outcomes.
The Group’s recent purpose and strategy initiative is an attempt to do the opposite of this – getting local managers to lead members in supporting operational needs. This approach must be resisted. A co-operative society should, first and foremost, concern itself with the unmet needs of members, as expressed by its members. Let’s make sure the reformed society reflects the views of its members.