This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.theguardian.com/business/2014/aug/08/co-operative-group-board-changes-lord-myners

The article has changed 4 times. There is an RSS feed of changes available.

Version 1 Version 2
Co-operative Group sets outs radical reform plans Co-operative Group sets out radical plans for shake-up in how it is run
(about 3 hours later)
The troubled Co-operative Group has unveiled proposals for a radical shakeup of the way it is run, seeking to draw a line under a disastrous year in which the 150-year-old mutual came close to collapse. The troubled Co-operative Group has published proposals for a radical shakeup of the way it is run, seeking to draw a line under a disastrous year in which the 150-year-old mutual came close to collapse.
Under the proposals, the Co-op's board will be slashed from 18 members to 11 and composed mainly of independent directors, as well as two executives. The proposals are broadly in line with what City veteran Lord Myners had recommended apart from one key aspect: he had proposed removing all the democratically elected members of the Co-op from the board. However, the mutual is offering members three seats on the board, in the hope that this significant concession will persuade its members to support the reforms. Under the proposals, the Co-op's board will be slashed from 18 members to 11 and composed mainly of independent directors, as well as two executives. The proposals are broadly in line with what City veteran Paul Myners had recommended apart from one key point: he had proposed removing all the democratically elected members from the board. The mutual is offering members three seats on the board in the hope that this concession will persuade its members to support the reforms.
Myners said: "The proposals do not go as far as I recommended in my review of governance but they represent significant progress in the right direction. The acid test will be whether they are able to attract outstanding candidates to join the board without compromising on necessary standards." Lord Myners said: "The proposals do not go as far as I recommended in my review of governance but they represent significant progress in the right direction. The acid test will be whether they are able to attract outstanding candidates to join the board without compromising on necessary standards."
He added: "The commitment to setting the bar at the right level wold be greater if those lay directors who have sat on the board over the last five disastrous years made clear that they accepted that they fell well short of the new standard and said that they would not be standing for election to the board." The Co-op refused to be drawn on this. He added: "The commitment to setting the bar at the right level would be greater if those lay directors who have sat on the board over the last five disastrous years made clear that they accepted that they fell well short of the new standard and said that they would not be standing for election to the board." The Co-op refused to be drawn on this.
The Institute of Directors voiced similar concerns, while welcoming the Co-op's proposals as a "welcome break from the failings of the past".
Its corporate governance adviser, Oliver Parry, said: "Without an entirely independently appointed board, there remain concerns about how much independent oversight the board will be able to exercise."
The Co-op's interim chief executive, Richard Pennycook, hailed the proposals as a "significant step towards meaningful reform" which, if approved by members, will "mark the end of the rescue phase for the group". He added: "It will be a very different board than we have at the moment and for the first time we'll have a couple of executive directors sitting on the board."The Co-op's interim chief executive, Richard Pennycook, hailed the proposals as a "significant step towards meaningful reform" which, if approved by members, will "mark the end of the rescue phase for the group". He added: "It will be a very different board than we have at the moment and for the first time we'll have a couple of executive directors sitting on the board."
The Co-op chair, Ursula Lidbetter, insisted that only people with "business acumen and commitment to coperative values and principles" would be chosen to serve on the board. "The bar will be high – the most important thing is to have a highly skilled board," she said. Pennycook added that experience of other organisations, for example in the education or public sector, could be considered relevant. The Co-op chair, Ursula Lidbetter, insisted that only people with "business acumen and commitment to cooperative values and principles" would be chosen to serve on the board. "The bar will be high – the most important thing is to have a highly skilled board," she said. Pennycook added that experience of other organisations, for example in the education or public sector, could be considered relevant.
After weeks of discussions to hammer out the details, following the annual meeting in May where members agreed to an overhaul in principle, the proposals will be put to a vote at a special meeting on 30 August. The Co-op's first-half results will be published just a few days later, on 4 September. The mutual still needs to find a new chief executive to replace Euan Sutherland, who quit in March after details of his £6.6m pay deal were leaked. It appears to have made little progress, with Lidbetter saying that management had been "working flat out" on governance reform.After weeks of discussions to hammer out the details, following the annual meeting in May where members agreed to an overhaul in principle, the proposals will be put to a vote at a special meeting on 30 August. The Co-op's first-half results will be published just a few days later, on 4 September. The mutual still needs to find a new chief executive to replace Euan Sutherland, who quit in March after details of his £6.6m pay deal were leaked. It appears to have made little progress, with Lidbetter saying that management had been "working flat out" on governance reform.
Myners had recommended a complete overhaul of the board, which is currently populated entirely by Co-op members. The former City minister was brought in after the organisation slumped to a £2.5bn loss, the worst in its history, and was forced to give up control of its banking arm after admitting catastrophic mismanagement. Its former chairman, Paul Flowers, nicknamed the "crystal Methodist", resigned in disgrace amid a drugs scandal. But Myners quit in May after encountering fierce resistance to his plans. Myners had recommended a complete overhaul of the board, which is currently populated entirely by Co-op members. The former City minister was brought in after the organisation slumped to a £2.5bn loss, the worst in its history, and was forced to give up control of its banking arm after admitting catastrophic mismanagement. Its former chairman, Paul Flowers, nicknamed the "crystal Methodist", resigned in disgrace amid a drugs scandal. Myners quit in May after encountering fierce resistance to his plans.
Lidbetter said the mutual was "very grateful" to the City veteran for the work he had done. "We built on that. You can still see the pillars that the Myners team put together."Lidbetter said the mutual was "very grateful" to the City veteran for the work he had done. "We built on that. You can still see the pillars that the Myners team put together."
The new board will be comprised of an independent chair as recommended by Myners, five independent non-executive directors, two executive directors including the chief executive and three member-nominated directors. Lidbetter will step down after a transitional period while Pennycook, a turnaround specialist, wants to return to his previous role of chief operating officer, and will in all likelihood sit on the board.The new board will be comprised of an independent chair as recommended by Myners, five independent non-executive directors, two executive directors including the chief executive and three member-nominated directors. Lidbetter will step down after a transitional period while Pennycook, a turnaround specialist, wants to return to his previous role of chief operating officer, and will in all likelihood sit on the board.
Another important change is a switch to "one member, one vote". At the moment, some members are more powerful than others.Another important change is a switch to "one member, one vote". At the moment, some members are more powerful than others.
The Co-op plans to start recruiting new board members immediately. A 100-strong council, led by a president elected for two years, will represent members and act as guardian of the mutual's values. A senate with 10-15 members, elected by the council, is to help co-cordinate its activities and act as a go-between with the board, the executive and members. Competency tests will also be applied to the council and the senate. The Co-op plans to start recruiting new board members immediately. A 100-strong council, led by a president elected for two years, will represent members and act as guardian of the mutual's values. A senate with 10-15 members, elected by the council, is to help coordinate its activities and act as a go-between with the board, the executive and members. Competency tests will also be applied to the council and the senate.
Lidbetter said: "These governance reforms represent the final crucial step in delivering the necessary change to restore the group and return it to health. This has been a process built on co-operation, focusing above all on creating a society where every member has a voice in shaping the group's future."Lidbetter said: "These governance reforms represent the final crucial step in delivering the necessary change to restore the group and return it to health. This has been a process built on co-operation, focusing above all on creating a society where every member has a voice in shaping the group's future."
Co-operatives UK, the independent body for the co-operative sector, has backed the new structure.Co-operatives UK, the independent body for the co-operative sector, has backed the new structure.
The Co-op has decided to focus on supermarkets, funeral homes, general insurance and legal services. It sold its farms business to the Wellcome Trust for £249m earlier this week, and offloaded its pharmacies for £620m last month. Pennycook said the mutual expected to sell its much smaller cash handling unit in the next month. The Co-op has decided to focus on supermarkets, funeral homes, general insurance and legal services. It sold its farms business to the Wellcome Trust for £249m this week, and offloaded its pharmacies for £620m last month. Pennycook said the mutual expected to sell its much smaller cash handling unit in the next month.