Members of The Co-operative Group back proposals to overhaul the way the business is run

Co-operative Group chair Ursula Lidbetter said it was 'a highly significant moment' for the group

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

Read more: Boots fights Guy Hands for £600m Co-op pharmacies
Co-op faces D-day
 

 

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Neil Pavier: Management Accountant

£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

Sheridan Maine: Commercial Accountant

£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

Laura Norton: Project Accountant

£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

Day In a Page

Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine
Letterman's final Late Show: Laughter, but no tears, as David takes his bow after 33 years

Laughter, but no tears, as Letterman takes his bow after 33 years

Veteran talkshow host steps down to plaudits from four presidents
Ivor Novello Awards 2015: Hozier wins with anti-Catholic song 'Take Me To Church' as John Whittingdale leads praise for Black Sabbath

Hozier's 'blasphemous' song takes Novello award

Singer joins Ed Sheeran and Clean Bandit in celebration of the best in British and Irish music
Tequila gold rush: The spirit has gone from a cheap shot to a multi-billion pound product

Join the tequila gold rush

The spirit has gone from a cheap shot to a multi-billion pound product
12 best statement wallpapers

12 best statement wallpapers

Make an impact and transform a room with a conversation-starting pattern
Paul Scholes column: Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?

Paul Scholes column

Does David De Gea really want to leave Manchester United to fight it out for the No 1 spot at Real Madrid?