The keenly anticipated Myners’ report into issues at the troubled Co-operative Group was published yesterday. Myners doesn’t pull any punches. He talks about a ‘manifestly dysfunctional board’ and comes to a view that there is a limited shared purpose among Group board directors. He goes on to propose a slimmed down board made up of independent directors and executives of the Group.
Everyone agrees that there is a need for radical reforms at the Co-operative Group and in her initial response the Chair, Ursula Lidbetter, has already indicated that the report will be taken seriously. Ed Mayo of Co-operatives UK has stated that there are welcome signs of emerging consensus over the need for change and renewal, which is positive.
It is absolutely right that the Co-operative Board needs to contain people with the appropriate skills to run the business. All businesses need to keep on top of this and the Co-operative Group is no exception.
There is concern amongst some Co-operative Group members about the potential for a weaker link between the membership and the Group. The report proposes a National Members Council, with significant representation from staff, but suggests reducing or removing representation on the Board itself.
The whole point of a co-operative is that it operates on behalf of its members. That connection is vital to a co-operative’s competitive advantage and its ability to respond to the needs of its members. One of the main reasons many of us shop at Co-operative supermarkets and pharmacies is because we know we are buying quality products, procured on ethical grounds with profits returning to people in our own communities, not distant shareholders.
The co-operative sector is much broader than just the Co-operative Group of course. There are hundreds of independent co-operative businesses across Wales, operating in a wide range of areas from food to furniture-making and from health to housing. Many of these have benefited in the past from support funded by the Group as part of its commitment to support other co-operatives. Research shows that the sector has done better than other mainstream businesses during the downturn. The co-operative model is a tried and tested one.
The Co-operative Group has faced difficult times before and has come through them. With thousands of people employed in its businesses across Wales, the future success of the organisation is crucially important to the Welsh economy. We wish it well as it implements the necessary reforms over the months and years ahead.
Derek Walker, Chief Executive, Wales Co-operative Centre