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
News
Bill Gates, founder of Microsoft and co-chair of the Bill and Melinda Gates Foundation
businessUber, Snapchat and Facebook founders among those on the 2015 Forbes Billionaire List
News
news... and what your reaction to the creatures above says about you
News
Jihadi John
newsMonikers like 'Jihadi John' make the grim sound glamorous
News
music
ebooks
ebooksA special investigation by Andy McSmith
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

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: A Customer Service Advisor is r...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Day In a Page

The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn
Yvette Cooper: We can't lose the election. There's too much on the line

Yvette Cooper: We can't lose the election. There's too much on the line

The shadow Home Secretary on fighting radical Islam, protecting children, and why anyone in Labour who's thinking beyond May must 'sort themselves out'
A bad week for the Greens: Leader Natalie Bennett's 'car crash' radio interview is followed by Brighton council's failure to set a budget due to infighting

It's not easy being Green

After a bad week in which its leader had a public meltdown and its only city council couldn't agree on a budget vote, what next for the alternative party? It's over to Caroline Lucas to find out
Gorillas nearly missed: BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter

Gorillas nearly missed

BBC producers didn't want to broadcast Sir David Attenborough's famed Rwandan encounter
Downton Abbey effect sees impoverished Italian nobles inspired to open their doors to paying guests for up to €650 a night

The Downton Abbey effect

Impoverished Italian nobles are opening their doors to paying guests, inspired by the TV drama
China's wild panda numbers have increased by 17% since 2003, new census reveals

China's wild panda numbers on the up

New census reveals 17% since 2003