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| Co-op Group announces sweeping reforms | Co-op Group announces sweeping reforms |
| (about 1 hour later) | |
| The Co-op has unveiled radical reforms to the way it is managed following a series of financial problems at the group. | The Co-op has unveiled radical reforms to the way it is managed following a series of financial problems at the group. |
| It will cut the number of board members from 18 to nine and create a board of directors who have qualifications suited to running the business. | It will cut the number of board members from 18 to nine and create a board of directors who have qualifications suited to running the business. |
| Members will be given one vote apiece. | Members will be given one vote apiece. |
| The Co-op, the country's oldest and biggest mutual organisation, lost £2.5bn last year following a massive loss at the Co-operative Bank. | The Co-op, the country's oldest and biggest mutual organisation, lost £2.5bn last year following a massive loss at the Co-operative Bank. |
| A review of the way the business was run was carried out earlier this year by Lord Myners, who called the group "manifestly dysfunctional" and recommended a major shake-up. | A review of the way the business was run was carried out earlier this year by Lord Myners, who called the group "manifestly dysfunctional" and recommended a major shake-up. |
| Euan Sutherland, who resigned as chief executive of the Co-op Group in March after 10 months in the job, said the organisation in its then form was "ungovernable". | |
| Independent | |
| Traditionally, directors were Co-op members, who did not necessarily have any relevant experience. They have included a retired teacher and a plasterer. | Traditionally, directors were Co-op members, who did not necessarily have any relevant experience. They have included a retired teacher and a plasterer. |
| The organisation's eight million members did not have a direct vote, but elected officials to vote on their behalf. | The organisation's eight million members did not have a direct vote, but elected officials to vote on their behalf. |
| The Co-op's members voted to introduce sweeping changes at a special meeting earlier this year. | The Co-op's members voted to introduce sweeping changes at a special meeting earlier this year. |
| The board will in future have a majority of independent directors - including an independent chairman and five independent non-executive directors. However, the board will have three positions for member-nominated directors, contrary to Lord Myners' recommendations. | The board will in future have a majority of independent directors - including an independent chairman and five independent non-executive directors. However, the board will have three positions for member-nominated directors, contrary to Lord Myners' recommendations. |
| The new rules will also protect against de-mutualisation. | The new rules will also protect against de-mutualisation. |
| Ursula Lidbetter, chair of the Co-operative Group, said: "These governance reforms represent the final crucial step in delivering the necessary change to restore the group and return it to health. | |
| "This has been a process built on co-operation, focusing above all on creating a society where every member has a voice in shaping the group's future." | |
| Sell-off | |
| The Co-op Group began as a small shop in Lancashire and has woven its way into British communities. There is a Co-op food store in every UK postal district and its businesses range from food retailing to funeral parlours. | |
| In 2013, the Co-operative Bank was found to have a £1.5bn gap in its finances and the Co-op Group then had to relinquish control of the bank as part of the subsequent rescue package. | |
| The Co-op Group has also been selling off parts of the business in order to reduce debt. | |
| This week it sold its farms business for £249m to health charity the Wellcome Trust, and last month it agreed to sell its 774-strong pharmacy chain for £620m to Bestway Group. |