Sunny

Sunny

max temp: 23°C

min temp: 15°C

ESTD 1874 Search

UK: Smaller board of directors at Co-op under reforms announced today

08:59 08 August 2014

A Co-operative Group foodstore

A Co-operative Group foodstore

Archant

The Co-op is to recruit a smaller board of 11 directors with “high standards of competence” as part of radical governance reforms announced today.

shares

The mutual, which received the backing of members to begin the changes at a landmark meeting in May, will also establish a 100-member council to act as guardian of the group’s values and to hold the board to account.

Other changes include a move to one-member-one-vote on significant matters such as the election of directors and major transactions.

The Co-op, which last year racked up a £2.5 billion loss following the worst period in its 150-year history, said the reforms will be put to a vote at a special general meeting on August 30.

Interim chief executive Richard Pennycook said approval of the governance changes will mark the end of the rescue phase of the group following recent progress in shoring up its balance sheet.

Co-op chair Ursula Lidbetter added: “These governance reforms represent the final crucial step in delivering the necessary change to restore the group and return it to health.”

Under a transitional structure, the Co-op’s board will reduce from 18 to nine as soon as the rules are agreed.

It will then look to appoint a new board consisting of a chairman and five independent non-executive directors, plus two executive directors, including the chief executive, and three member nominated directors.

The Co-op said: “All board directors will be expected to meet the high standards of competence commensurate with the needs of a business of the scale and complexity of the group and a demonstrated commitment to Co-operative values and principles.”

The changes are based on the four-point resolution proposed by Lord Myners and voted on by members at the special meeting in May.

The former City minister previously warned that the Co-op, which has around eight million members and a 90,000-strong workforce, faced a bleak future unless it took urgent steps to replace its “dysfunctional” board structure.

Lord Myners, who has since stepped down from the Co-op board after he was appointed a director in December, said it was apparent from the first time he attended a board meeting that not one of its members had the ability to address the complex issues faced by a group with £1.4 billion of debt.

His “plc and beyond” structure met an initially hostile response from some parts of the movement but then won unanimous support at the vote.

The council, which will act as guardian of the Co-op values, will be composed of a maximum of 100 members and led by a president, who will be elected for a term of two years. There will also be a senate to co-ordinate the activities of the council and act as a link with the board and members.

The board of the Co-op is recommending that members vote in favour of the changes, while the structure also has the support of Co-operatives UK.

shares

2 comments

  • Swatts asks some good questions. East of England Co-op members should especially be considering whether their society is at risk, as the Co-operative Group was, from having unqualified amateurs with little or no business experience occupying the roles of Directors. Their recent financial results should be ringing alarm bells.

    Report this comment

    The Main Man

    Saturday, August 9, 2014

  • Will our local East of England Co-op be following the national group and revising its own top heavy board and management structure? This year's annual report shows 16 Directors each receiving £7,690 in fees (as well as expenses) and a five strong 'Leadership Team' - with the highest paid on over £235,000 and a total for the five of over £770,000. Does a retailer of this size really need that level of remuneration? What are the qualifications for all these 'experts' and why does a organisation of this size need a board of 16 and 5 Chief Exec level roles?

    Report this comment

    swatts

    Friday, August 8, 2014

The views expressed in the above comments do not necessarily reflect the views of this site

Dame Fiona Kendrick:, chief executive of Nestlé  UK & Ireland

Food giant Nestlé has announced plans to close its defined benefit pension scheme, sparking the threat of industrial action.

The Treasury has sold another 1% stake in Lloyds Banking Group.

The taxpayers’ stake in Lloyds Banking Group has fallen to below 16% after the Government sold off another tranche of shares.

The installation of solar panels on the roof of Precision Marketing Group's premises in Lamdin Road, Bury St Edmunds

A Suffolk-based firm will be among the organisations taking part in a nation-wide celebration of solar energy tomorrow.

Candy Gaga'’s Wanda Hewell, right, and daughter, Cherish.

Tower Ramparts in Ipswich now has its very own castle – thanks to the success of a local sweet shop business.

Stansted Airport

A report into the future of Britain’s airports does not rule out a second runway at Stansted – and raises fears of extra night flights to the Essex airport.

Growth in manufacturing eased last month  to its slowest level in two years.

Britain’s manufacturing sector grew at its slowest pace in more than two years last month, impacted by subdued demand from Europe.

Speedy Hire
 has warned that its results for this year will come in

Tool rental business Speedy Hire saw nearly a third of its stock market value wiped off after it announced the shock departure of its chief executive and warned over a major blow to full year profits.

Greene King chief executive Rooney Anand.

Pubs and brewing group Greene King today posted another year of record revenues, with sales within its key Retail division topping £1billion for the first time.

Suffolk Coastal considers convenience store bid

Planning chiefs have responded to concerns about noise and antisocial behaviour arising from proposals for a new convenience store in Kesgrave by insisting on closing times being brought forward an hour and the installation of a barrier to restrict overnight parking.

Tim Dunford, managing director and master brewer at the Green Jack Brewery, third from left, with Beer for Summer judges Mark Dorber, left, and Charlie McVeigh of The Draft House, right, and Peter Gordon, on trade director of Budweiser Budvar.

A Suffolk brewing company is celebrating after winning a new national “Beer for Summer” competition.

Most read

Most commented

Topic pages