Editorial: A slimmer Group will move it further away from the bankers

All signs are pointing to a much slimmer and more refined Co-operative Group by the end of the year – in terms of both governance and business offering....

All signs are pointing to a much slimmer and more refined Co-operative Group by the end of the year – in terms of both governance and business offering.

Stakeholders in the co-operative – from elected members to independent societies – are swiftly moving to reform governance into something that is less complex, more transparent and easily manageable.

Group chair Ursula Lidbetter admits it is ambitious to have a set of new rules ready to present to members by the self-set deadline of September. But taking into account external factors (bank lenders, pension trustees, regulators and the media), the pressure is on elected members to change.

Ms Lidbetter further warns that those with the power to make change should be conscious of the outside world.

But even some of those who have been most outspoken over the past few months are welcoming the need for reform – albeit with some caveats.

Another unknown factor is what will happen with the movement’s buying group. Co-operative Retail Trading Group is part and parcel of the Group and even logistically ingrained within the society. But almost every single retail society (bar Clydebank, which withdrew over local food concerns) depends on this setup, which provides everything from own-brand food to cheaper cans of Coca-Cola.

One of the worst fears of retail societies over the past 12 months must have been the demise of this service had the Group collapsed. Now on the back of the realisation that such a thing could have happened, the governance reform is looking at ways to “strengthen the framework”.

So what will happen? The most logical choice is to wind back to when it was the Co-operative Wholesale Society and spin CRTG out as an independent federal society. Ownership of CWS is how independent societies have control within the Group, but surely preservation of the food operation is of paramount importance.

A separate entity with all costs equally shared may also suit the Group, which currently bears the brunt of CRTG’s costs.

An independent CRTG may also have more flexibility in linking with a European buying group – a seemingly innate pipe dream that has been endlessly talked about by co-operators for a number of years.

By the end of the year, it is expected that the Group’s farms will have been sold off in their entirety and that pharmacy branches will also have been offloaded.

The Group’s new purpose and strategy is also laser-focused on the needs of communities, which presumably means there will be less attention paid to wider human-interest campaigns such as tar sands and saving the bees.

It is unavoidable that the co-operative is on a path of attenuation, with debts totalling £1.4bn. A much leaner Group needs to ensure full control is in the hands of members and not its bank lenders.

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