Four-fifths of Co-operative Group members have voted in favour of radical changes to the struggling business, including plans to shrink the company board to include three elected members.
Chair Ursula Lidbetter hailed the overwhelming show of support for the reforms as a “defining moment” during the special meeting which took place in Manchester, earlier this week.
The Co-Operative Group has suffered with a £2.5 billion deficit, created by its banking arm, as well as numerous recent scandals regarding its company executives. The new reforms intend to lift the company back into profitability, with new plans aimed at governance and sustainability.
The smaller board will be made up of elected professional business people, replacing previous group directors. This comes after a review from former city minister Lord Myners criticised what it claimed is a vast inefficiency in the cooperatives governance system, with 15 lay members on its board, including an engineer, a plasterer and a retired deputy headteacher. Each member will now also only have one vote.
“These reforms represent the final crucial step in delivering the change necessary to return the group to health, said Lidbetter.
“This will strengthen the society and enable us to move forward with the urgent work to rebuild the business and deliver on our renewed purpose, in the interests of all our colleagues and our millions of members and customers.”
The mutual recently announced the loss of 38,000 customers amidst a “hurricane of negative publicity” following its near collapse.
The company did manage to slash its first-half losses, however, as well as record an increase of 9,700 customers who switched to the Co-op Bank, double the number from six months earlier.
Photo source: Howard Lake via Flickr