Overcast

Overcast

max temp: 11°C

min temp: 8°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

Sainsbury's chief executive Mike Coupe.
Photo: Sainsbury's/PA Wire

The City will this week look for details of how Sainsbury’s plans to overhaul Argos when the supermarket posts its annual results next week, while trading at rival Morrisons and banking giant HSBC will also be in the spotlight.

Avanti supports CLIC Sargent charity

Networking group getting Muddy and wiggy for young cancer patients

Nick and Kim Hoare from Ivy Grange Farm near Halesworth who run a glamping site with five yurts.
Photo: Nick Butcher

A glamping firm hoping to banish memories of sodden sleeping bags and leaking tents is catching the eye of campers after an upmarket break.

Royal Bank of Scotland has reported a sharp increase in first quarter losses.

Royal Bank of Scotland has reported a first-quarter pre-tax loss of £968million, more than double last year’s figure of £446m.

Tom Boother is running from Land's End to John O'Groats in aid of EACH and Great Ormond Street. Marquis Suffolk is lending Tom a motorhome for him to sleep in during the challenge.

Tom’s charity challenge - running 816 miles from Land’s End to John O’Groats

Most read

Great Days Out

cover

Click here to view
the Great Days Out
supplement

View
HOT JOBS

Show Job Lists

Streetlife

Newsletter Sign Up

Great British Life

Great British Life
MyDate24 MyPhotos24