Co-operative's governance 'not fit for purpose' - read the full Myners report
So says Paul Myners in a 184-page report published this morning. Lord Myners, the Co-operative Group’s senior independent non-executive director, has published the detailed report you can read in full here, following his comprehensive review of the Group’s governance.
Today’s report says the Group’s present governance architecture and allocation of responsibilities is “not fit for purpose” and calls for radical change. It highlights “deplorable governance failures” that have been exposed over the past year which have led to the “near-collapse of the Group”, warning that without change, the Group’s level of debt will see its “autonomy and independence being strictly curtailed”.
It also identifies a “significant democratic deficit”, with the vast bulk of ordinary members having weak rights and limited ability to influence the Group. Lord Myners urges the current elected democrats to “put their self-interest to one side for the greater good” and vote through far-reaching reforms with the necessary pace of change; he says they must avoid the mistakes of earlier reform initiatives which were “largely kicked into touch”.
Myners said the Co-op should create a new streamlined board led by a chairman with no previous association with the group, six or seven independent non-executive directors and two executive directors.
He said the non-executive directors should have the same skills and experience as independent directors sitting on the boards of the group's main rivals.
Myners said a nominations committee should be set up to screen and propose candidates for the board.
Co-op's current board consists of 15 non-executive directors elected by individual regions and five non-executive directors elected from independent co-operative societies.
Myners blamed the group's problems on an unwieldy structure that reflects its foundation in numerous local and regional co-operatives.
As an alternative, he recommended that a National Membership Council be set up, consisting of about 50 individuals, including around 10 employees. The council would elect a 'steering committee of 12 members including representatives from independent societies.
Myners also proposed that all Co-op members be given the right to vote on the election of board members, the right to attend general meetings and to approve significant transactions. That follows a similar model to ordinary shareholders of publicly listed companies.
Updated 11am: Former Co-op Bank chairman Paul Flowers has today been fined after admitting three drugs possession charges in court in Leeds.
Flowers, who was suspended from the Methodist Church amid newspaper reports over his drug use and other extra-curricular activities, appeared at Leeds Magistrates' Court this morning.
He was fined £400 and ordered to pay £125 costs.
He pleaded guilty to charges of possessing cocaine, methyl amphetamine and ketamine. He was arrested in November and charged last month.