In December 2013, in the wake of the Paul Flowers scandal, The Co-operative Group realised it needed to look long and hard at its governance.
It needed to work out whether it was right for elected members to dominate its 20-strong board, whether executives should sit on that board, and whether it should generally take a more PLC approach to its governance.
It turned to former Treasury minister and Marks & Spencer chairman Lord Paul Myners for help.
Myners took on the role of senior independent director (the only one on the group board) and was tasked with chairing the governance review.
A ‘progress report’ of that review was hurriedly released last month after group CEO Euan Sutherland quit his role claiming the society was “ungovernable”.
The progress report was hard-hitting and very critical of the Co-op Group’s governance. He laid out 10 recommendations which included the creation of a group board made up of an independent chair, six to seven non-execs and two executive directors, and for the CEOs of independent co-op societies to cease to sit on the group board.
The recommendations, he said, were designed to “achieve radical reform of the group board, while ensuring that the group remains fully in accord with its core co-operative values and principles”.
But the help the society so greatly needs has been turned away.
On Wednesday, it was revealed Myners had quit his role, although he is reportedly set to complete his review. His recommendations are due to be voted on by members at its agm next month.
Myners resignation came on the same day Midcounties Co-op revealed its board had voted not to support Myners recommendations. Midcounties is an independent society from the Co-op Group, but it buys goods through the Co-operative Retail Trading Group, and shares the same fascia. Its CEO Ben Reid also sits on the Co-op Group board.
But Midcounties said its board had “unanimously agreed that if Lord Myners, as expected, presents proposals which fail to reflect representative democracy or the interests of the independent societies, then it will vote against them.”
The Co-op Group needs to change, and overhauling its governance would be a massive step forward. So calling for help but then rejecting that help seems short-sighted and wrong.
Co-operative principles are important, but there are many companies, including within grocery, that have proved that with the right ownership model and governance, they can thrive. Just look at employee-owned John Lewis, or member-owned Nisa.
Myners’ resignation is yet another blow for the troubled society. And coming a week before it is due to reveal heavy losses in its full year results, it adds yet more weight to the question – where does this leave The Co-op Group now?
Losing track of the Co-op crisis? See thegrocer.co.uk’s detailed timeline of all the events since March 2013.
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