As the special general meeting to decide the Co-operative Group’s future approaches, the need for reform is clear; but are the current proposals for reform the only practical option? I am writing this because, as a member of the Group, I believe the proposals need a crucial change.
The change needed applies to the proposed make-up of the nominations committee. As it stands, the nominations committee is dominated by directors. The proposed rulebook says:
‘Its membership shall comprise the Group chair, two independent non-executive directors (one of whom will be the senior independent director), two member nominated directors and the president. The Group chair shall chair the nominations committee.’ (p. 33, Point 45.1, c, i).
If these proposals are voted for, then directors will get to nominate directors; this would embed the supremacy of chumocracy over democracy into the rules themselves, tainting the reforms from the very start. The real power in the new structure lies with the nominations committee: those that control who is on the board thereby control the ethos that new board members will bring to the board.
The current proposals can be changed in a way that combines the knowledge of the directors with that of the people voted onto the national membership council. The co-operative alternative I am suggesting would have three members of the board and three members of the national membership council.
In order to work, and to maintain a balance between money and values, there simply needs to be a rule that no new candidate can be nominated by the committee unless they receive at least four of the possible six votes; two of the four votes having to come from the directors on the nominations committee and two from the national membership council members on the nominations committee. Such a rule could resemble the following:
‘Its membership shall comprise the Group chair, the senior independent non-executive director, one member nominated director, the president of the national membership council, and two members of the national membership council to be chosen by ballot as part of the national membership council elections process. The Group chair shall chair the nominations committee. No nomination shall be considered valid unless approved by at least four members of the committee; two of which must be either a director or the Group chair, and two of which must be national membership council members.’
Some might say such a change can wait until after the existing proposals are passed, but can it? If the proposals are passed, then the composition of the nominations committee will not be an area of the business that the national membership council has any influence over. The national membership council’s proposed remit regarding any structural changes is clear in the proposed rules:
‘Determining the composition, role and proceedings of member structures upon such terms and budgetary constraints as are determined by the board and to use all reasonable endeavours to establish such member structures by not later than the society’s annual general meeting in May 2015.’ (p. 49, 79.5, a)
As you can see, this means that if the proposals are passed as they are, the directors shall choose the terms of any changes the national membership council wants to make to the structures. Also, the national membership council will not have any say over the nominations committee, as it is not a membership structure.
This is the only chance to change the composition of the nominations committee; either the existing proposals are voted against and the nominations committee is brought to the negotiating table, or the existing proposals are voted for and the nominations committee is signed-over to the directors.
What will happen if the proposals are voted against? It will not mean the end of reform – the Group’s executive will not give up on reform because the Group’s investors won’t let them. The banks will wait another month because waiting one extra month to see the conclusion of the nominations committee negotiations means they will get their money back; pulling the financial plug means they will not.
As long as they know the reforms are imminent, they will wait to get a bigger financial return than they could from the alternative.
If the existing proposals are rejected, and the nominations committee is put on the negotiating table for a month before a new vote on some new terms, a balanced nominations committee can be achieved. Lay members will get a say over who approves nominations on their behalf, directors will not be able to pressure each other to assure their own re-nomination and the Co-operative Group will remain a co-operative.
• Kat Rose is a lay member of the Co-operative Group.
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