When Co-operative Group members from the Manchester area committee launched the springboard.coop website in February, we published seven core propositions for how the governance of the Co-operative Group could be improved.
Many people have told us they agree with these proposals, and that they offer a useful way to look at reform. Here, we look at each proposition and what’s needed now that four principles for governance reform have been agreed at the special general meeting.
1. Co-operative spring – create an open 21st century culture. The lack of an open debate about reform highlights a deep problem in our co-operative — a closed, formal and secretive culture that alienates many members, particularly younger members who are used to open, frank discussion on social media. Creating a 21st century co-operative will mean change at all layers, providing opportunities to make a real difference for activist members, local managers and employees. This notion needs to be at the front of our minds when looking at how to implement reform.
2. Closer to members – focus on communities. We have called for a better connection between the democratic structure and the communities where we operate. The four-point motion says nothing about how to do this or what should happen to the area committee system. The proposed National Members Council will have 30 elected members representing seven million. We need to create a mechanism to connect the NMC to communities and decide what to do about area committees. We should design a system that helps elected members and activists work with stores and local managers so they can make a real difference locally.
3. Regional initiatives – allow regions to innovate. If regional boards are abolished, we need to find ways to promote regional innovation. This could lead to increased business efficiency as well as making the Co-op less remote from members. We could learn from the success of independent societies such as Midcounties.
4. A real say – make voting work for members. There is a proposal for a nominations committee to select the most appropriate candidates for the board and ensure a good mix of skills. We should consider making this a subcommittee of the NMC rather than the board. It’s normal in listed companies for major shareholders to appoint directors to fill some places on the board. We should consider giving the NMC a similar power, perhaps with a requirement that the people it appoints should themselves be elected members of the NMC. Any proxy system should require members to opt in. For example, it has been proposed that the NMC would have the power to recommend that members vote against the re-election of directors if the board ignores the NMC on a matter of important principle. This is of limited use because it is so drastic, but it is an important last resort. For this power to have any meaning, the proxy system must not hand millions of votes to the chair by default.
5. Employee stake – turn employees into partners. We are delighted that there is finally recognition of the importance of employees in the democratic governance of our co-operative. Now we must involve employees in the discussion on how to implement reform.
6. Member capital – welcome member capital. We have massive debts. We are selling assets. The third ICA principle says members contribute to capital. If we’re going to be a real co-operative, we must provide an opportunity for members to invest urgently.
7. Clear boundaries – clarify roles and set limits. A two-tier board system with the NMC effectively in the role of ‘supervisory board’ could be made to work – while remaining true to the principle of member control. It could bring the separation of powers that we have called for.
However, as we argue above, there are important details that need clarifying to ensure it really has the power to set the goals and define limits, and truly call the board to account. We need to ensure this to give confidence to members, employees and independent societies that they really do own and control the society.