Co-operative Group announces process to elect future member nominated directors

A process will be developed in appointing future member nominated directors at the Co-operative Group, following a controversial election process.

Ahead of the Group’s annual meeting, Midcounties Co-operative threatened an injunction over the election process of selecting member nominated directors. Midcounties argued that candidates recommended by the members’ council were excluded from the ballot in a manner that was “neither transparent, nor objective”.

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”.

Hours before the announcement of the member nominated directors election, a joint statement from the Co-operative Group board and council outlined a solution to the disagreement.

It said: “A key part of the new governance arrangements for the Co-operative Group was the inclusion of three member nominated directors on the board. The first election is taking place now with three strong candidates standing for these inaugural roles. One of the MNDs will be appointed for one year only and their position will therefore be subject to election in 2016.  We fully expect the next MND election to be contested.

“Opportunities to strengthen this new process have been identified.  The board and council have committed to work together to develop enhanced arrangements for future elections.

“Work to improve the process will begin immediately after the AGM with the firm objective of achieving a contested election for the next MND election process. We will do this by working to ensure a strong pipeline of candidates who meet the required criteria. The review, which will be conducted by the council and the board, demonstrates the commitment to the unique and important role of the MND within the society’s governance framework. It will be wide-ranging and will include a development programme for potential candidates, an improved nominations process and selection and assessment to be conducted jointly by the board and council.”

To take this forward, a Task and Finish Group will review the proposals and process, which will be made up of board and council members, including representatives of the independent societies.

The review will develop a joint process including:

• respective responsibilities of board and council to be determined at the outset;
• an application process which includes both the opportunity for candidates to explain how they have applied co-operative values and principles within their work, evidences their commercial acumen and encourages people to stand;
• with the assistance of a professional search firm, a joint initial sift against specified criteria to determine candidate eligibility;
• a separate structured assessment event to ensure effective assessment of candidates to be run jointly by the board and council (with advice from a professional search firm) with candidates advised of the requirements at nomination and criteria for attendance agreed;
• the final selection of those who will appear on the ballot paper to be agreed jointly by representatives of the board and the council;
• process to start within six months of the 2015 AGM.

Collectively the group will also develop a talent pool to:

• Support the objective of contested elections, a commitment to developing a process to identify a pipeline of a small number of strong candidates.  This would include candidates with potential drawn from colleagues, Council members and those with a strong co-operative background.
• Jointly, to create a development programme to support them in receiving exposure to business issues to increase their capability and likelihood of the satisfying the competence framework.
• Develop an induction session for all new directors and executives, run by council, to cover knowledge and understanding of co-operative enterprise, our distinct values and principles which would start, ideally, post AGM 2015 or as soon as possible afterwards.

• Read more: Council president challenges Group chair to work ‘more co-operatively’