Defiant Myners calls for urgent reform at Co-op

LORD Myners, the former government minister, has warned the Co-operative Group’s existence depends on whether reforms to modernise the way it is managed are adopted.

Publishing his Independent Review of Governance, Lord Myners, who has already said he would step down as the group’s senior independent non-executive director as a result of opposition to his plans, hit out at a small number of members wielding power within the mutual organisation.

He says there is a “culture of entitlement” which has created a “strong vested interest” among this group of traditionalists, and as a result they are “reluctant to rethink existing ways of doing things.”

Referring to the opposition he faced from within the movement Lord Myners said he had experienced “repeated instances where there has been denial of responsibility, corrosive suspicion, deliberate delay and a practice of hiding behind ‘values’ in order to deflect or stifle criticism and protect self interest.”

He argues that questions over the group’s future governance are not just a technical matter, but are highly significant given the group’s plight, where he says high levels of debt are threatening the Co-operative’s “autonomy and independence”.

There is no shortcut to recovery he says, and admits the membership will have to make “painful choices” if the group can move forward.

He admits though that in the run up to the annual meeting in Manchester on May 17 – where there will be a vote to accept his reforms, or not – that he is not confident of a positive outcome.

His proposals include:

Creating a smaller board  (it currently has 21 members) comprising of an independent chair, six or seven experienced non-executive directors and two executive directors. The non-executive directors would have similar skills and experience to those at competitors.

The current board make-up is “manifestly dysfunctional”, he states, while asserting that he has no interest in adopting a plc model  – a  separate member-led council should advise on ethical matters should be created.

Lord Myners said: “I have no doubt that the Co-operative Group can over the next five years reverse a decline that started over 50 years ago. But I am less confident that it will choose to do so.

“Much will depend on the small number of ‘elected democrats’, less than one in 10,000 of the group’s entire membership. Will they put their self-interest to one side for the greater good, acknowledging the collective failure of the current board and the crippling deficiencies of the entire governance system?

“I would say that the Group board and many on the regional boards are still stuck in denial over this near ruinous failure of governance, whereas the vast majority of ordinary members feel justified anger.”

The Co-operative Group welcomed the report. Chair Ursula Lidbetter said: “A resolution containing four key principles on reform is being put to members at a General Meeting in May and we will build from there to ensure we put the right changes in place. Paul’s report will be an invaluable contribution to that work.

“As group chair, I see this as essential and urgent work that is critical to our future, enabling us to build a more effective organisation which can deliver for all our members, customers and colleagues.”