On Friday, Sharlene Goff, the Financial Times’ Retail Banking Correspondent, wrote about Ursula Lidbetter, who has the “the unenviable task of taking forward a set of radical governance reforms proposed by Lord Myners in the face of bitter opposition from many of the mutual’s powerful regional representatives”.
Goff describes Ms Lidbetter, who joined the Co-op Group 30 years ago and has run the Lincolnshire society for the past decade as “the kind of insider the Co-op traditionalists want to remain in charge”.
This Retail Banking Correspondent insists that Ursula Lidbetter ‘must’ convince the Co-op’s senior members to approve a plan that would wrest control from their own representatives – and presumably get it to fall in line with other retail corporates.
Ms Goff selects two of Lord Myners’ more acceptable recommendations:
- to ‘wipe out’ the Co-op’s current board of 20 members which include a plasterer, a university lecturer and a nurse (implication: what would they know about banking?),
- to replace it with one controlled solely by the company’s executives and new independent non-executive directors
She highlighted the fact that 1,200 employees are backing Lord Myners’ proposals, but failed to mention that they are not part of a spontaneous ‘Co-op Spring’, but members of the trade union Unite, who appealed to the Co-op’s regional board members to accept the former City minister’s governance restructuring because they believed that their jobs are “at risk”.
Ms Lidbetter said that the Co-op’s 8m members – who, according to rhetoric rather than practice – have a say in how the business is run and take a share of its profits – “almost unanimously” want reform. But what sort of reform?
The FT’s retail banking correspondent may well be aware that the 8m members have little influence on management, because she adds that the Co-op’s future is likely to be decided by a smaller group.
The reforms have provoked hostility from the Co-op’s directors: there are 15 regional board members and five selected from well-managed independent Co-operative Societies,who ‘attacked’ Lord Myners for failing to engage with them. Ms Lidbetter is said to have met and ‘sought to charm them to win their support.
Goff’s colleague, John Gapper, the FT’s chief business commentator suggests a rather patronising compromise:
“ . . . to allow at least a couple of Co-op members to sit on the new group board alongside the independent and executive directors. That should ease the concerns of the Co-op traditionalists that are determined not to lose control of the business”.
He ended with a threatening prophecy: “If this group continues to resist reform, then even a £2.5bn loss may not be the extent of the Co-op’s woes”.