Management overhaul and new employee powers to help ‘shape the Group’s future’
The Co-operative Group has announced proposals to reform its governance structure, following Lord Myners’ review into proceedings published in May 2014.
The detailed plans are reflected in a new ‘rulebook’ and will be put to a vote at a “special” general meeting on 30 August.
In April, more than 1,000 staff pledged their support for Lord Myners’ recommendations, including a complete overhaul of the directorship.
Under the new plans, the board will be cut from 18 members to 11, and will be composed of a majority of independent directors including an independent chair, five independent non-executive directors, two executive directors, including the group chief executive.
Three seats are reserved for member nominated directors.
The Co-operative said they were committed to the “creation of a Board of directors elected by members that is individually and collectively qualified to lead an organisation of this size and complexity.”
The new structure will be underpinned by a move to ‘one member one vote’, another of Lord Myners’ recommendations after he said the current system was “more like one vote per 10,000 members.”
A 100-member strong council will be set up to “act as a guardian of the Group’s purpose, values and principles” the Co-op said, and will give employees greater voice to hold the board to account.
The Group proposed an elected senate would help connect the council, with the board, the executive and members.
Ursula Lidbetter, chair of The Co-operative Group, said the proposals would give members a “voice” in proceedings: “These governance reforms represent the final crucial step in delivering the necessary change to restore the Group and return it to health.
“This has been a process built on co-operation, focusing above all on creating a Society where every member has a voice in shaping the Group’s future,” she said.
Ian Snaith, of DWF LLP, an independent legal advisor to the Group, gave the proposals his full backing.
"These reforms will increase member control of the society. For the first time every member will have a direct voice in electing directors and Council members,” he said.
“To improve the quality of business decisions, an elected board will have the skills and experience it needs to provide effective challenge to the Executive inside the decision-making process.
“The Council and Senate will maintain and improve active member involvement at all levels of the Society and the Council will hold the board to account for its business strategy and its application of Co-operative Values and Principles.”
Snaith said the reforms could have an impact on the future of other large co-operatives.
“These reforms provide the International Co-operative Movement with an exciting new model for the Governance of large co-operatives,” he said.