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President of international co-operative movement slams former Co-op chief President of international co-operative movement slams former Co-op chief
(about 3 hours later)
The president of the international co-operative movement has launched a stinging attack on the former boss of the Co-operative Group, Euan Sutherland, for creating a culture clash at the 170-year-old mutual and failing to heed the views of its 8m members. The president of the international co-operative movement has launched a stinging attack on the former boss of the Co-operative Group, Euan Sutherland, for creating a culture clash at the 170-year-old mutual and failing to heed the views of its 8 million members.
Dame Pauline Green said Sutherland, who quit amid revelations of his £6.6m pay deal, had bungled a consultation with Co-op members about the future of the group and was wrong to switch the focus of the group's senior executives from the heart of the organisation in Manchester to London. Dame Pauline Green said Sutherland, who quit amid a row over his £6.6m pay deal, had bungled consultation with Co-op members about the group's future and was wrong to switch focus of the group's senior executives from the heart of the organisation in Manchester to London.
She also warned that the poor handling of proposals from former Labour minister, Lord Myners, to reform the Co-op boardroom has exacerbated the situation, leading to "suspicion" and "mistrust" between the members and the management. She also warned that the poor handling of proposals from former Labour minister Lord Myners to reform the Co-op boardroom has exacerbated the situation, leading to "suspicion" and "mistrust" between members and management.
In addition Green, president of the International Co-operative Alliance, which is akin to an international trade union for co-operatives, took issue with Sutherland's description of the Co-op Group as "ungovernable".In addition Green, president of the International Co-operative Alliance, which is akin to an international trade union for co-operatives, took issue with Sutherland's description of the Co-op Group as "ungovernable".
In a comment piece for the Guardian, Green also accuses Sutherland of losing touch with the co-operative movement. In an article for the Guardian, Green also accuses Sutherland of losing touch with the co-operative movement.
"The current problems at the Co-operative Group come down to a culture clash between the management and members who own the Co-operative Group," she said. "The current problems at the Co-operative Group come down to a culture clash between the management and members who own the Co-operative Group," she says.
Despite her criticism of the management – who do not currently have seats on the board, which is made up of members of the co-operative movement – she urges the board to give "serious consideration" to proposals to reform the structure devised by Lord Myners. She said she advocated changes five years ago. Despite her criticism of the management – who do not have seats on the board, which is made up of members of the co-operative movement – she urges the board to give "serious consideration" to proposals to reform the structure devised by Myners. She said she advocated changes five years ago.
Myners has proposed the Co-op set up a new board, similar to a typical plc boardroom with a place for the chief executive. Myners also wants a separate national membership council to represent members.Myners has proposed the Co-op set up a new board, similar to a typical plc boardroom with a place for the chief executive. Myners also wants a separate national membership council to represent members.
Sutherland arrived last May and was confronted by the near collapse of the bank – now propped up by £1.5bn of fresh capital. Last month he embarked on a public survey, encouraging staff, members and shoppers to "have your say" on the group's future. Green described that initiative as "ill-judged". She said it had "crystallised fears amongst the members about the downgrading of their ownership rights by asking leading questions that appeared to be a direct attack on (Co-op) principles like an economic return to members, or member control." Sutherland arrived last May and was confronted by the near collapse of the bank – now propped up by £1.5bn of fresh capital. Last month he embarked on a public survey, encouraging staff, members and shoppers to "have your say" on the group's future.
Green described that initiative as ill-judged. She said it had "crystallised fears amongst the members about the downgrading of their ownership rights by asking leading questions that appeared to be a direct attack on (Co-op) principles like an economic return to members, or member control".
She said Sutherland's decision to move the "entire new executive management team" to London was a bad move which had resulted in "undermining confidence and morale in Manchester, and isolating the executive group from everyday contact with the remaining vestiges of co-operative knowledge and experience".She said Sutherland's decision to move the "entire new executive management team" to London was a bad move which had resulted in "undermining confidence and morale in Manchester, and isolating the executive group from everyday contact with the remaining vestiges of co-operative knowledge and experience".
Last night, a spokeswoman for the executive management team at the Co-op said while a London office had been established it was wrong to say that any senior executives had been relocated. "Did management spend more time in London over the last year than before? Yes. But no one was relocated and Manchester remains the head office," she explained. Last night, a spokeswoman for the executive management team at the Co-op said while a London office had been established, it was wrong to say any senior executives had been relocated. "Did management spend more time in London over the last year than before? Yes. But no one was relocated and Manchester remains the head office," she explained.
She added that Sutherland had always made clear that he understood and was committed to the founding principles of the Co-op organisation, adding: "The 'Have Your Say' initiative which ends on Monday was all about ensuring all 8m members of the organisation had their views heard rather than just the 600 active members who tended to be on area and regional committees." She added that Sutherland had always made clear he understood and was committed to the founding principles of the Co-op organisation, adding: "The 'Have Your Say' initiative which ends on Monday was all about ensuring all 8m members of the organisation had their views heard rather than just the 600 active members who tended to be on area and regional committees."
With the farms and pharmacy chain up for sale, the Group had been expected to report losses of at least £2bn on Wednesday, largely caused by problems inside its troubled banking group, which is now just 30% owned by the Co-op. However, the results have now been delayed until 17 April as a result of the upheaval caused by Sutherland's resignation. Green said he should be replaced by someone able to repair the damage to relations with members and a "commitment to the co-operative values and principles". With the farms and pharmacy chain up for sale, the group had been expected to report losses of at least £2bn on Wednesday, largely caused by problems inside its troubled banking arm, which is now just 30% owned by the Co-op. However, the results have now been delayed until 17 April as a result of the upheaval caused by Sutherland's resignation. Green said he should be replaced by someone able to repair the damage to relations with members and a "commitment to the co-operative values and principles".
Green also defended the co-operative model, saying that the "investor-led business model" was still being used to run banks despite the near meltdown of the financial system in 2008.Green also defended the co-operative model, saying that the "investor-led business model" was still being used to run banks despite the near meltdown of the financial system in 2008.