Co Op Members Vote For Change

Co Op Members Vote For Change.

Members of the ailing Co-Operative Group have voted at a Special General Meeting (SGM) at their headquarters in Manchester to overhaul how the mutually owned group is managed i.e. changing its corporate governance and reporting structure.

What does this mean?

Co-Op is a mutual i.e. it is owned by its members i.e. you the savers.

The Group has suffered huge financial losses over the last few years e.g. taking over Britannia Building Society cost more than it generated.

The Group had to raise over £3bn from members to cover losses made including a £2.5bn loss last year.

Criticism has been levelled by many on how the business has been managed and potential poor investment and business decisions made.

The Vote - What on?

• Board members must now be elected by members
• Board members must have relevant experience
• Protection to block demutualisation
• One member one vote
• Accountability – the Board become more accountable to members

Comment

As ever with large groups, accountability is key to success. Board members who make decisions must be held to account.

The Co-Op will survive and indeed we have had many members contact us about financial security of savings and investments. Co-Op investments are covered by the Financial Services Compensation Scheme (FSCS). There is therefore some security. In addition, the British Government has confirmed in many previous statements that it will not let a British Bank ‘go under’ – we only have to look at the biggest corporate rescue in UK history, The Royal Bank of Scotland, at £26bn + to understand that the Government has the will to do this, so we are not worried about Co-Op even things got worse.

We wish the Co-Op well with the new governance procedures and in time, they will recover.