A deal to stop legal action over this weekend’s Co-operative Group annual meeting is trying to be reached.
Ahead of the Group’s meeting on Saturday, Midcounties Co-operative has threatened an injunction over the election process of selecting member nominated directors.
Midcounties argues that candidates recommended by the members’ council have been excluded from the ballot in a manner that was “neither transparent, nor objective”.
During the last few days Midcounties and the Group have engaged in a discussion aiming to resolve their differences over the election process.
Ruth FitzJohn, president of Midcounties, said the discussions had been both “courteous and productive”. The Group board is considering a proposal on Friday that, if agreed, could enable Midcounties to withdraw its threat of taking legal action.
She said: “It was almost inevitable that the early stages of the new democratic process would give rise to issues to be resolved. By adopting a co-operative approach where both parties have the best long term interests of the movement at heart, we are confident we will emerge from this phase a stronger movement and fit to face the future challenges with confidence.”
Six candidates were selected by the members’ council but the transitional committee, which is led by Group chair Allan Leighton, rejected three of them for a lack of “commercial acumen”.
The three candidates that made it onto the ballot paper were Hazel Blears, Labour MP from 1997-2015; Ruth Spellman, chief executive, Workers’ Educational Association; and Paul Chandler, former chief executive of Traidcraft. They are standing for three board seats.
Meanwhile those rejected by the committee, which is mainly made up of board members, were Dame Pauline Green, president of the International Co-operative Alliance; Nick Eyre, lawyer and former Co-operative Group secretary; and John Briddon, regional stores director at the Group.
The Group claims that the transitional search committee was within its powers when declaring that the three candidates did not meet the eligibility criteria. But Midcounties, East of England and the Phone Co-op have a legal opinion which argues that unless all three of the rejected candidates failed to satisfy the eligibility criteria on an objective basis, the election process would not have been conducted in accordance with the rules and the results, if it proceeds, will be void.
To address these concerns, the Group suggested a compromise to Midcounties, committing to binding arbitration in exchange for them to drop the legal threat. The election of member nominated directors is not an AGM act, which means that Saturday’s meeting will go ahead as planned. However, if Midcounties and the Group decide to seek binding arbitration discussions will continue after the AGM.
Earlier this week the Group’s chair, Allan Leighton told independent societies that elections to the board will be run differently next year. In a letter sent to them before Midcounties’ intervention, he promised a wide-ranging review that would include “a development programme for potential candidates, an improved nominations process, and selection and assessment to be conducted jointly by the board and council”.