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Co-op Group: Governance Reform & Job Security

NACO has become increasingly concerned at the manner in which recent events at the Co-operative Group have been played out in the public arena, and in particular the very negative press articles aimed at the Co-operative Group.

When the Chief Executive, Euan Sutherland, tendered his resignation he commented that the Co-operative Group was “ungovernable” and there have been a series of articles that criticised the ability and business acumen of the Group Board.

The recent articles by Lord Myners have further damaged the public perception of the Co-operative Group. Comments attributed to him have caused upset for colleagues through unfair criticism, and his well publicised condemnation of the democratic structures has caused instability for those very structures.

NACO has seen little detail of the future strategic direction of the Group. This lack of information combined with the possible impact of the Project Orion cost cutting exercise, and recent announcements of the intention to sell the Pharmacy and Farm businesses, have contributed to growing fears regarding future job security.

The instability in both governance and future business strategy needs to be addressed as a matter of urgency to provide a stable environment for colleagues. This does not mean a “quick fix” but requires decisive action from both the democratic structures and the senior management to ensure that the Group can continue to trade effectively and profitably.

At the same time we need to ensure that the values and principles of the co-operative movement are adhered to and that the co-operative difference remains integral to all that we do. This applies not only to the future democratic structures that govern the business, but also in relation to business strategy and the manner in which senior management run the business.

NACO recognises and supports the need for change and believe this can be achieved through dialogue and discussion between those who care deeply about the future of the Group.

As such we are pleased that the Board has committed to a reform process and a resolution is being proposed to next month’s Annual General Meeting that supports significant change, from which further details can be developed. The Board resolution proposes the following:

  • A Board of Directors elected by the members qualified to lead the Co-operative Group
  • A structure that allows members appropriate powers to hold the Board to account for both performance and adherence to co-operative values and principles
  • A move to ‘one member one vote’ and retaining representation for independent Co-operative Societies
  • Rules to protect against demutualisation.

In the interests of our members, NACO hopes that the resolution is adopted wholeheartedly on 17 May and that next steps can be embarked on without delay.

NACO wishes to see this positive and co-operative solution replicated in the future business strategy of the Group and will work closely with the Group to agree definitive tactical solutions to ensure job security and a successful co-operative business are delivered.

NACO will continue to communicate with all members regarding developments at the Co-operative Group.