Members of The Co-operative Group have backed proposals to overhaul the way the business is run.
Members voted unanimously in favour of a four-point resolution by Lord Myners, which includes replacing the existing 20-strong board of representatives with a slimmed down “plc and beyond” structure staffed by professionally-trained directors.
The vote follows a disastrous year in which the Co-op lost £2.5 billion.
Ursula Lidbetter, Co-operative Group chair, announced that its members had voted “unanimously” in favour of the reforms.
She hailed it as “a highly significant moment” for the group.
Lord Myners recently warned that the Co-op would have to sell assets such as its £1 billion funeral care business in order to meet the demands of its lending banks, if it did not adopt reform.
The Co-op's huge losses mainly stemmed from the near-collapse of its banking arm, which had a £1.5 billion hole in its balance sheet following the ill-fated takeover of the Britannia building society.
A damning report by Sir Christopher Kelly into the bank's woes also found that the wider group had badly let down its millions of members by its failure to provide “proper stewardship” of the business.
Saturday’s ballot in Manchester was decided by representatives of its independent societies and affiliated organisations - who hold 22 per cent of the vote - and others voting on behalf of its regional membership boards making up the remaining 78 per cent.
Detailed reforms involving rule changes will still have to be voted on at a later date and will require two-thirds support.
The four-point resolution called for:
The creation of a board of directors “qualified to lead an organisation of the size and complexity of the Co-operative Group”.
Establishment of a separate structure which will give the group's eight million members powers to hold the board to account for the performance of the business and “adherence to co-operative values and principles”.
A move to the concept of “one member one vote”, but with “appropriate representation” for the Co-op's independent societies.
Rules to protect against any ending of the group's mutual status.
The motion was backed by Ms Lidbetter and interim chief executive Richard Pennycook.
Speaking to reporters, Ms Lidbetter said that an additional board meeting had been arranged before the end of this month to formulate a timetable for reform.
“This is essential and urgent work that is critical for our future,” she said.
“Our members have given us a resounding endorsement for reform. We will begin immediately.”
Business Secretary Vince Cable said: “Today's vote in favour of reform is a step in the right direction. It is important mutuals are strengthened as an alternative business model and the Co-op, which has 90,000 employees, is a major part of that movement.
"Lord Myners has identified the key problem of governance and ensuring a consumer base of millions is democratically represented in ways that ensure professional, competent management.
“It is in this latter area that the Co-op has fallen short and why radical solutions are needed to get the Co-op back on track.”
Additional reporting by Press Association