Co-operative Group’s rule proposals meet international co-operative standards

A raft of rules issued by the Co-operative Group to change its governance structure have been deemed to meet co-operative principles. Co-operatives UK, the guardian of the principles...

A raft of rules issued by the Co-operative Group to change its governance structure have been deemed to meet co-operative principles.

Co-operatives UK, the guardian of the principles in the UK, has said the rule changes comply with the movement’s values and principles, issued by International Co-operative Alliance.

But it has told the Group to monitor how members are engaged in the new structure, should the rules be approved at its special general meeting on 30 August.

After examining the rules, Co-operatives UK said they should be seen as “integrating a package of changes intended to ensure that the society operates in the interests of its ultimate owners, the members.”

It recognised that there is a benefit to have a board with “outstanding expertise … to steer the society in the interests of members, including offering support for and challenge to the executive leadership where appropriate.”

Co-operatives UK secretary general Ed Mayo said: “There has been more ink spilled and opinions voiced over the nature of governance in the Co-operative [Group] than almost any other issue in the movement over the last year. But now the detailed proposals are settled, following the outline resolution in May, Co-operatives UK has been able to complete a careful and sober independent analysis of the rules.

“We have used the same methodology that we would use for any co-operative – mandated by the International Co-operative Alliance and with an approach that has been reviewed and consulted on relatively recently with our members. We are content that the proposed rules are consistent with international co-operative principles.”

Proposed changes opens up a significant change in the traditional model of a consumer society, according to Co-operatives UK, where historically members have been elected to the board.

In its note on the rules, Co-operatives UK said: “The spirit of the rules is to be more inclusive than before, giving a voice to members more widely, through new channels of accountability and through the work of the council. They maintain a clear and explicit recognition of international co-operative values and principles.”

The sector body acknowledges that the rules also take a different approach to democratic member control. It said the Group must keep under review how the council works in practice, including its resources, the implementation and how members engage with it.

Added Mr Mayo: “The new governance model has an emphasis on an expert board, coupled with a new way of giving voice to members. It differs from what went before, or what has been the norm for UK retail consumer societies, but this is not the test we apply.

“Governance models across the world vary, but the essence of all the effective models is the way in which they comply with fundamental principles, underpinning member benefit, ownership and control. Now more than ever, both in the rules moving forward and the spirit in which they are implemented, the Co-operative Group needs to focus on being a successful co-operative business.”

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