The Co-operative Group votes overwhelmingly for adoption of radical new governance structure

August 30, 2014

The Co-operative Group (“the Group”) announces that its members have today voted overwhelmingly in favour of a resolution on the adoption of a new Rulebook to radically reform the Group’s governance structure.

At the Group’s Special General Meeting in Manchester, 83% of votes were cast in favour of a Resolution, proposed by the Board and backed by the Executive team, which contained adoption of the new Rulebook of the Group. The new governance structure, drawn up after a process of extensive consultation with members, includes the creation of a smaller, more effective Board of Directors and a more inclusive structure for members. It is underpinned by a move to one member one vote, allowing members to vote on matters concerning the Group’s future, including the election of Directors and significant transactions and to participate in the Group’s general meetings.

Ursula Lidbetter, Chair of The Co-operative Group, said:

“This is a momentous and defining moment for The Co-operative Group and I am delighted that our members have voted in favour of this much-needed radical reform to our governance structure. These reforms represent the final crucial step in delivering the change necessary to return the Group to health. This will strengthen the Society and enable us to move forward with the urgent work to rebuild the business and deliver on our renewed purpose, in the interests of all our colleagues and our millions of members and customers.

“In voting for real change we have demonstrated our co-operative values of self-help and self-responsibility. The rest of the Board, the Executive team and I would like to thank all those involved in working on these reforms, developed through a unique co-operative approach. We now have to bring to life the new structure. But I am confident that with every member now having a voice, the Society will grow ever-stronger and more effective and make a distinctive contribution to communities throughout the UK and the wider co-operative movement.”

In summary, the new constitutional structure will see the creation of:

  • A Group Board of 11 people (reduced from 20), composed of a majority of Independent Directors. The Board will be made up of an Independent Non-Executive Chair, five Independent Non-Executive Directors, two Executive Directors, (including the Group Chief Executive) and three Member-Nominated Directors
    • All Board Directors will be expected to meet the high standards of competence commensurate with the needs of a business of the scale and complexity of the Group and a demonstrated commitment to Co-operative Values and Principles
  • A Council to represent members and to act as guardian of the Group’s Purpose, Values and Principles and the Society’s Constitution, with the power to hold the Group Board to account
    • The Council will be composed of a maximum of 100 Members
    • The Council will be led by a President, elected for a term of two years
  • A Senate, elected by the Council, to help co-ordinate the activities of the Council and to act as a nexus for interactions between the Council, the Board, the Executive and members.

Independent Societies will be appropriately represented, both as Corporate Members of the Society and on the Council and Senate.

The approved Rules will now be submitted to the Financial Conduct Authority for registration. Upon registration, expected to be early autumn, the new Rules and the Transitional Provisions will come into effect.

The key transitional arrangements are:

  • Transitional Board: an interim transitional Board structure which will remain in place until the earlier of either new Board members being recruited or the Group’s Annual General Meeting in 2015.
  • The recruitment of new Board members will start immediately.
  • The Board will be reduced to nine seats as soon as the new Rules are registered. The make-up of the Board will be: the five members of the current Chairs’ Committee, one Independent Professional Non-Executive Director from one of the business Boards, two members of the current Board (to be elected by the current Board), plus the Group Chief Executive Officer. Transitional Directors will rotate off as soon as their replacements are appointed as part of the move towards the new Board composition
  • Transitional Council: all Group Board members not sitting on the Transitional Board will transfer to the Transitional Council. Other members will be all Regional Board members and Chairs of the Regional Values & Principles Committees
  • Regional Boards will remain in place to 31 December 2014
  • Area Committees will remain in place until the Group’s 2015 Annual General Meeting (following which the Society will establish new structures)
  • The Group’s governance arrangements will be subject to a formal review within three years of September 2014 and at least once every five years subsequently. Tidy up Rule change motions will be agreed at the Group’s 2014 Half Year Meeting and the 2015 Annual General Meeting.

The new Rules and governance structure were supported by Co-operatives UK, the independent apex body for the co-operative sector in the UK, which described the new structure as being more inclusive for Group members, while maintaining a clear recognition of co-operative values and principles.

Enquiries:

The Co-operative Group

Therese O’Donnell
Tel: 07738 622866

Russ Brady
Tel: 07880 784442

Tulchan Communications

Susanna Voyle
Tel: 07980 894557

Giles Kernick
Tel: 07817 913082

Notes to Editors:

Voting  -  Voting at the Special General Meeting was by a poll and required a two- thirds majority of votes cast at the meeting, which was attended by over 200 delegates. The delegates came from the 127 Independent Society Members (representing circa 21% of the vote) and the seven Regions (representing the remaining circa 79%).

Attendees – Attendance at the meeting is open to the appointed delegates of Independent Society Members and Co-operative Group Regions only.

The Co-operative Group is the UK’s largest co-operative business, whose purpose is “Championing a better way of doing business for you and your communities.” Owned by more than eight million members, The Co-operative Group operates a total of 4,500 outlets, with around 87,000 employees and has an annual turnover of £11 billion with interests across Food, Funerals, Insurance and Legal services.