Symbolic: ‘One Angel Square’: the award-winning headquarters of The Co-operative Group in Manchester
On Friday, Claer Barrett, deputy UK News Editor at The Financial Times, reported on the Co-operative Group’s outlined governance reforms.
Stripping out various belittling adjectives and adverbs and references to Paul Flowers, the message relayed is that most lay members will be replaced by ‘experienced, independent directors’.
Ursula Lidbetter, chair of the Co-op, stated that applicants will have to pass a testing process, carried out with the help of a professional search firm. Three member-nominated directors will be retained against the advice of former City minister Paul Myners.
The proposed constitutional structure would see the Co-op’s current board reduced from 18 members to 11, the majority being independent directors, including an independent chair, plus the group chief executive, chief operating officer and three member-elected directors.
The displaced lay members will join a “council” of up to 100 members with the “power to hold the group board to account” and act as the guardian of the group’s “purpose, values and principles”.
The council would be led by a president, elected for a term of two years, and would elect a “senate” of up to 15 people to “act as a nexus for interactions between the council, the board, the executive and members”.
The reforms have been approved by the Co-op’s board and executive committee, and will be put to the vote at a special general meeting on August 30.
Ms Lidbetter confirmed she would step down once an independent chair was recruited. Richard Pennycook, who took over as interim chief executive said he was “likely” to be on the new board. “It is my intention to step back to my chief operating officer role,” he said.
He compared the new structure of a board – a council and a senate – with his experience of the boards of large listed companies: “Instead of having 25 one-to-one meetings with institutional shareholders, we will have one big engagement with one body which represents the members. Of course, there will be the usual rich spectrum of views, but it will be one conversation.”
A fiery commentator responded: “The changes at the Co-op are designed to distance ownership from responsibility which does not augur well for the future. Mrs Lidbetter’s assertion that the “bar will be high” for the member directors is stupid. Ultimately, the members own the Co-op and will elect whoever they please irrespective of any bar. . . The days when housewives and carpenters deferred to welfare CEOs, professional box tickers, lawyers, accountants, recruitment consultants and FT leader writers may well also be drawing to a close”.