The struggling Co-operative Group has confirmed it will set out radical reforms to its members in September after revealing its timetable for the shake-up. This comes after members voted unanimously in favour of change earlier this month.
The timetable agreed by the board will give the group until the end of July to consult with area committees, regional boards and independent societies. The group then plans to issue draft society rules in mid-August for approval at a special general meeting to be held in early September.
“It is currently anticipated that the new rules, subject to regulatory registration, will take effect as soon as possible after approval”, the organisation added.
The release of the schedule follows members of the Co-operative Group voting unanimously in favour of implementing structure changes that aim to see a complete overhaul of the business.
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The changes were recommended in a review conducted by Lord Myners, who resigned from the group in April. The review labelled the Co-op’s board as “manifestly dysfunctional” and warned that urgent changes were needed if the firm was to maintain its value. It added that the present structure of the group was “not fit for purpose” and its near collapse was down to “deplorable governance failure”.
The suggested reforms focus on three areas, including ensuring that board members possess the skills and experience the role demands. The other targeted areas are embedding co-operative values and principles in the business and ensuring that all members benefit from being part of the co-operative.
The suggested reforms originally faced opposition, with some commentators saying Myners was proposing a plc business model for the group. Myners refuted these claims saying he wanted the group to “survive and flourish” as part of the communities it operated in.
For 2013, the group reported “disastrous” losses of £2.5 billion, marking the worst performing year in its 150-year history. The losses reflected the capitalising of the Co-operative Bank, after the discovery of a £1.5 billion black hole in its balance sheet last year, which led to lenders taking over.
A separate review, conducted by Sir Christopher Kelly, focused on the bank and also blamed poor management and governance for its failings.
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