Lord Myners' prescription can restore group to health
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Wednesday 12 March 2014
Outlook Lord Myners' proposals for the Co-op board have much to recommend them. As you'd expect from a former Blair-era minister, they're a Third Way option between plc and mutual. They make the main board far easier to manage, based on a traditional executive and non-executive team, yet retain some external oversight from a separate committee of ordinary members.
It sounds similar to the boards in Germany, with their twin boards of executives and workers' representatives, which have created an arguably more harmonious corporate world than we have here. The key is in getting the balance of power right between the board of the executives and that of the members.
Turning around the Co-op needs drastic actions that will not be universally popular – job losses and disposals for starters. The chief executive must be able to make those calls quickly and without having to win approval votes from scores of employees.
But the members' board – if it's given enough, but not too many, teeth – will be able to exert enough influence to ensure the business holds true to its founding beliefs of fairness and co-operative ownership.
Lord Myners was several weeks from delivering his final report when he got the emergency call to present his preliminary findings on Monday night, so there are still plenty of details to get right. But, barring any howlers in the forthcoming small print, members should be minded to vote yes.
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