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Co-op Group in appalling state and unlikely to fully recover, says ex-boss Co-op Group in appalling state and unlikely to fully recover, says ex-boss
(about 2 hours later)
The Co-operative Group is in an appalling state and is unlikely to return to its glory days, according to a former boss.The Co-operative Group is in an appalling state and is unlikely to return to its glory days, according to a former boss.
Sir Graham Melmoth, who ran the group of supermarkets, funeral homes and pharmacies until 2002, said he expected its members would support the crucial vote on Saturday on reforming the way the business was run. The management has warned that without reforms the Co-op, which lost £2.5bn last year, would face intensified demands from its bankers to take control. Sir Graham Melmoth, who ran the group of supermarkets, funeral homes and pharmacies until 2002, said he expected its members would support the crucial vote on Saturday on reforming the way the business is run. The management has warned that without reforms the Co-op, which lost £2.5bn last year, will face intensified demands from its bankers to take control.
"It's an appalling situation to have got into. It's got to the point where it is seriously damaged and so damaged it won't recover to what it was," said Melmoth."It's an appalling situation to have got into. It's got to the point where it is seriously damaged and so damaged it won't recover to what it was," said Melmoth.
Respected within the co-operative movement for having fended off a hostile bid in the late 1990s, Melmoth will be among a number of speakers addressing a conference on the eve of the vote which coincides with the Co-op group's annual meeting general meeting. Respected within the co-operative movement for having fended off a hostile bid in the late 1990s, Melmoth will be among the speakers addressing a conference on the eve of the vote, which coincides with the GCo-op group's annual general meeting.
Members of the south-east region of the Co-op – one of seven regions which together own 78% of the group – have called for Melmoth to be consulted on the reform process, after the furore stirred up by measures proposed by Lord Myners. Members of the south-east region of the Co-op – one of seven regions which together own 78% of the group – have called for Melmoth to be consulted on the reform process after the furore stirred up by measures proposed by Lord Myners.
The former City minister has called for a slimmed down board to replace the current one, on which he sits alongside 15 representatives from the regions and five from the independent societies – who own the remaining 22% of the group. Under his proposals none of these individuals would remain on the board and members' views would instead be heard through a national members council. The former City minister has called for a slimmed-down board to replace the current one, on which he sits alongside 15 representatives from the regions and five from the independent societies, which own the remaining 22% of the group. Under his proposals none of these individuals would remain on the board and members' views would instead be heard through a national members' council.
At Saturday's meeting members will be asked to back four principles from Myners' recommendations: the creation of a board of directors elected by members; a structure that gives members powers to oversee the board; a "one member, one vote" system; and provisions to protect against demutualisation. The intervention by Melmoth came amid fresh boardroom upheaval ahead of Saturday with a two-line statement announcing the departure of Munir Malik, who had been suspended amid claims he had falsely described himself as a chartered accountant.
At Saturday's meeting members will be asked to back four principles from Myners's recommendations: the creation of a board of directors elected by members; a structure that gives members powers to oversee the board; a "one member, one vote" system; and provisions to protect against demutualisation.
"I think probably that there is enough wriggle room in the motion which the board has put forward for a few things to be considered … Clearly the group's in a parlous state [but] that doesn't mean to say that everything that comes out of the stable has to be accepted," said Melmoth."I think probably that there is enough wriggle room in the motion which the board has put forward for a few things to be considered … Clearly the group's in a parlous state [but] that doesn't mean to say that everything that comes out of the stable has to be accepted," said Melmoth.
Ursula Lidbetter, who chairs the group and runs the Lincolnshire Co-op, told members in a webcast on Monday that the Myners' proposals were not "stapled to the back" of the resolution and opened the door to consultation on a package of reforms that could start on Sunday. Ursula Lidbetter, who chairs the group and runs the Lincolnshire Co-op, told members in a webcast on Monday that the Myners's proposals were not "stapled to the back" of the resolution and opened the door to consultation on a package of reforms that could start on Sunday.
Two special meetings are expected to take place in the coming months to vote on specific changes to the rules under which the Co-op is governed.Two special meetings are expected to take place in the coming months to vote on specific changes to the rules under which the Co-op is governed.
According to literature prepared in advancer of Friday's conference to discuss reforms, Melmoth has become "dismayed and discouraged by the turn of events engulfing the group". According to literature prepared in advance of Friday's conference to discuss reforms, Melmoth has become "dismayed and discouraged by the turn of events engulfing the group".
Among the other speakers on Friday are Patrick Gray – the president of Midcounties, the largest independent society which is to give its support to the reform resolution despite earlier concerns about the Myners' proposals.Among the other speakers on Friday are Patrick Gray – the president of Midcounties, the largest independent society which is to give its support to the reform resolution despite earlier concerns about the Myners' proposals.
All the independents are thought to be ready to back the resolution while the regional boards are to meet before Saturday. The South East board is thought to have voted against backing the resolution for reform. All the independents are thought to be ready to back the resolution while the regional boards are to meet before Saturday. The South East board is thought to have voted against backing the resolution for reform.Jo Bird, a Co-op activist who is organising Friday's conference, said the wording of the resolution being put to the vote on Saturday was sensible. "Everybody accepts the need for change and we can all unite [behind that]," said Bird.
Jo Bird, a Co-op activist who is organising Friday's conference, said the wording of the resolution being put to the vote on Saturday was sensible. "Everybody accepts the need for change and we can all unite [behind that]," said Bird. Members are weighing up whether the principles being put forward retain crucial elements unique to co-ops and if the resolution is about adopting the Myners principles in full, or a variation of them. Writing on the website of Mutuo, which promotes mutuals, one of its associates, Cliff Mills, said the proposals will result in the society ceasing to be "a co-operative owned and controlled by its members".
Members are weighing up whether the principles being put forward retain crucial elements unique to co-ops and if the resolution is about adopting the Myners' principles in full, or a variation of them. Writing on the website of Mutuo, which promotes mutuals, one of its associates, Cliff Mills, said the proposals will result in the society ceasing to be "a co-operative owned and controlled by its members".