Damning Report Urges Co-Op to Get Radical Organisational and Skills Overhaul
Amid today's news of a damning report which has former City minister Lord Myners branding the Co-Op's current board as "manifestly dysfunctional", he has recommended replacing it with a smaller board made up of people with better business experience, including marketing skills, if it is to survive the competitive marketplace.
Lord Myners commented to the BBC: "The group has lost half of its net worth over the past four years, circa £3.5bn of erosion of wealth. It is one of the great national business calamities and it is being led by a board totally unable - because of a lack of experience - to hold them to account."
Supporting this view, last month the Co-op Group reported losses of £2.5bn for 2013, its worst results ever.
The current multi-layered system of group and regional boards plus area committees is said to drastically slow down decision-making, since "directors claim that they need to get an opinion from their respective region before condoning a course of action", even though it is their job to make up their own minds.
In the report, Lord Myners, who resigned from the Co-op board in April after his suggestions for reforming the group's corporate structure ran into resistance, proposes a board with six or seven independent directors and two executives as well as a separate body to handle members' concerns, called the National Membership Council.
The streamlined board he says should be made up of members with similar skills and experience to those at rival companies, such as Tesco and Sainsbury's in the food sector and Nationwide in lending.
Nevertheless, while the Co-op Group commissioned the report, it is not obliged to act on the suggestions. Lord Myners has branded the group's board as "still stuck in denial over this near ruinous failure of governance".