British group backs new reforms drive
London, May 18, 2014
Britain's Co-operative Group has voted unanimously to accept proposals for far-reaching reforms designed to avoid a repeat of the near-catastrophic mistakes of recent years and secure the mutual's future.
Independent director Paul Myners drew up the proposals to change the governance of the 150-year-old group, which lost control of its bank and slumped to a £2.5 billion ($4.2 billion) loss last year.
The reforms voted on by delegates at a special general meeting included creating a new board led by an independent chairman, and non-executive directors with commercial experience on a par with the boards of its retail rivals.
Co-operative Group chair Ursula Lidbetter said it was a "hugely significant" moment for the group, which has a £10 billion turnover, 90,000 employees and more than 3,000 stores.
"Our members have voted unanimously in favour of reform," she said after the vote.
"It is clear that colleagues, members and customers are looking to the democrats to deliver the reforms necessary to restore the group's reputation and return it to financial health."
The Co-operative's problems stem from an ill-fated 2009 takeover of the Britannia building society, which saddled it with a portfolio of risky property loans during the financial crisis. A drugs scandal involving Paul Flowers, the former chairman of its bank, then moved the group's problems from the business pages to the front pages.
Lidbetter told the meeting, "years of bad business decisions crystallised into one very ugly number at the bottom of our accounts: A £2.5 billion loss. We are at a very fateful point in the history of the Co-operative Group, and indeed the whole of the movement."
Myners, a former government minister and City grandee, said earlier this month "radical decisions on governance needed to be taken very soon if the Co-op was to be saved."-Reuters