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Co-op gears up for crucial and stormy vote on Myners proposals Co-op gears up for crucial and stormy vote on Myners proposals
(4 months later)
The Co-op faces a critical poll on its future on Saturday when key principles on radical reform of the troubled mutual go to the vote at a special meeting.The Co-op faces a critical poll on its future on Saturday when key principles on radical reform of the troubled mutual go to the vote at a special meeting.
Former City minister Lord Myners has proposed a major shake-up of the food-to-funerals business after a disastrous period in which it slumped to a £2.5bn annual loss – its worst ever – in 2013.Former City minister Lord Myners has proposed a major shake-up of the food-to-funerals business after a disastrous period in which it slumped to a £2.5bn annual loss – its worst ever – in 2013.
But Myners fears traditionalists within the 150-year-old organisation are "still stuck in denial" about its problems and will not support the plans.But Myners fears traditionalists within the 150-year-old organisation are "still stuck in denial" about its problems and will not support the plans.
These include sweeping away the 20-strong board of representatives from the co-operative movement, who currently include an engineer, a plasterer and a retired deputy head teacher.These include sweeping away the 20-strong board of representatives from the co-operative movement, who currently include an engineer, a plasterer and a retired deputy head teacher.
He wants to replace this with a slimmed-down "plc and beyond" structure staffed by professionally-trained directors.He wants to replace this with a slimmed-down "plc and beyond" structure staffed by professionally-trained directors.
The former Marks & Spencer chairman was appointed a director of the Co-operative Group in December but has announced he is to leave following this weekend's vote.The former Marks & Spencer chairman was appointed a director of the Co-operative Group in December but has announced he is to leave following this weekend's vote.
He has said it was apparent to him from the first time he attended a board meeting that not one of its members had the ability to address the complex issues faced by a group burdened with £1.4bn of debt.He has said it was apparent to him from the first time he attended a board meeting that not one of its members had the ability to address the complex issues faced by a group burdened with £1.4bn of debt.
Myners believes the Co-op will survive but faces the prospect of having to sell assets such as its £1bn funeral care business to meet the demands of its lending banks, if it does not adopt reform.Myners believes the Co-op will survive but faces the prospect of having to sell assets such as its £1bn funeral care business to meet the demands of its lending banks, if it does not adopt reform.
Bitter resistance to the changes led to chief executive Euan Sutherland leaving the group earlier this year saying it was ungovernable.Bitter resistance to the changes led to chief executive Euan Sutherland leaving the group earlier this year saying it was ungovernable.
This weekend's ballot will be decided by representatives of its independent societies and affiliated organisations – who hold 22% of the vote – and others voting on behalf of its regional membership boards making up the remaining 78%.This weekend's ballot will be decided by representatives of its independent societies and affiliated organisations – who hold 22% of the vote – and others voting on behalf of its regional membership boards making up the remaining 78%.
Reformers were given a recent boost by the Midcounties Co-operative – the largest of the independent societies – reversing its previous opposition to an interim report from Myners after his full report was published. Reformers were given a recent boost by the Midcounties Co-operative – the largest of the independent societies – reversing its previous opposition to an interim report from Myners after his full report was published.
Midcounties president Patrick Gray told BBC Radio 5 Live: "Lord Myners is absolutely right to say that the group needs a smaller, experienced group of board members in order to take some very difficult decisions."Midcounties president Patrick Gray told BBC Radio 5 Live: "Lord Myners is absolutely right to say that the group needs a smaller, experienced group of board members in order to take some very difficult decisions."
The Co-op's huge losses mainly stemmed from the near-collapse of its banking arm, which was discovered to have a £1.5bn hole in its balance sheet following the ill-fated takeover of the Britannia building society.The Co-op's huge losses mainly stemmed from the near-collapse of its banking arm, which was discovered to have a £1.5bn 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 found that the wider group had badly let down its millions of members by its failure to provide "proper stewardship" of the business.A damning report by Sir Christopher Kelly into the bank's woes found that the wider group had badly let down its millions of members by its failure to provide "proper stewardship" of the business.
Its stake in the lender has now fallen from 100% to below 30% after bondholders including US hedge funds took up the majority of shares as part of a rescue plan.Its stake in the lender has now fallen from 100% to below 30% after bondholders including US hedge funds took up the majority of shares as part of a rescue plan.
This weekend's vote will consider a resolution based on four key points drawn from the Myners report, and will need to achieve only a simple majority to be passed. This weekend's vote will consider a resolution based on four key points drawn from the Myners report, and will need to achieve only a simple majority to be passed.
But detailed reforms involving rule changes will have to be voted on at a later date and will require two-thirds support.But detailed reforms involving rule changes will have to be voted on at a later date and will require two-thirds support.
The four-point resolution calls for the creation of a board "qualified to lead an organisation of the size and complexity of the Co-operative Group"; establishment of a separate structure to give the group's 8 million members powers to hold the board to account; a move towards "one member one vote"; and rules to protect the group's mutual status. The four-point resolution calls for the creation of a board "qualified to lead an organisation of the size and complexity of the Co-operative Group"; establishment of a separate structure to give the group's 8 million members powers to hold the board to account; a move towards "one member one vote"; and rules to protect the group's mutual status.
Members of Unite will lobby the meeting, pressing for reform of the group's structures and protesting against plans to outsource the Co-op's retail logistics operation in south-west England.Members of Unite will lobby the meeting, pressing for reform of the group's structures and protesting against plans to outsource the Co-op's retail logistics operation in south-west England.
National officer Adrian Jones said: "The values and ethos of the Co-op have been hard pushed recently by decisions that have caused irreparable damage, not only to the image of the Co-op, but to its very fabric.National officer Adrian Jones said: "The values and ethos of the Co-op have been hard pushed recently by decisions that have caused irreparable damage, not only to the image of the Co-op, but to its very fabric.
"Without reform the road ahead is extremely rocky. Unite members want a return to a business that has a bright future and treats its workforce with respect. Not one that is dogged with poor leadership and poor governance."Without reform the road ahead is extremely rocky. Unite members want a return to a business that has a bright future and treats its workforce with respect. Not one that is dogged with poor leadership and poor governance.
"The decision to outsource drivers with no concrete business rationale is yet another example of poor decisions being taken and of an organisation that has lost its way. It should be stopped and the workforce properly consulted.""The decision to outsource drivers with no concrete business rationale is yet another example of poor decisions being taken and of an organisation that has lost its way. It should be stopped and the workforce properly consulted."