What's Going on at the Co-operative Group?

Of the six thousand co-ops in the UK, the Co-operative Group is often the one to hit the headlines, and over the last eighteen months, despite a recent return to profit, often also for the wrong reasons...

Of the six thousand co-ops in the UK, the Co-operative Group is often the one to hit the headlines, and over the last eighteen months, despite a recent return to profit, often also for the wrong reasons. The Daily Mail puts this down to the criticisms of a "livid old guard", while the Guardian has picked up the cause of political affiliations. No-one seems to want to talk about the core business of retailing. So what's going on at The Co-operative Group?

Behind the apparent soap opera, it is good to recognise that there is a reason why there is open debate and that is because The Coop is a democratic business, owned by millions of member shoppers. It is a public institution and a matter of public concern. But democracy can be hard. It's especially hard in a business. Even more so in a business that's coming back from the brink.

At the Co-operative Group, tempers have flared in the run up to its AGM - the first under a new system in which over 2.6 million members can vote on key strategic issues for the business.

Previously the electorate was limited, giving an individual vote only to those serving on area committees. The new governance rules, agreed at the AGM last year, aimed to increase both member democracy and business professionalism among the board of directors which oversees the business.

It extended the vote to all members that have spent over £250 that year, but reduced the number of member nominations on the board to three, with the majority of board members independent directors or drawn from the executive team.

This was accompanied by a strengthening of the executive team at the Group, which recent annual results show has started to put the business back on track after a very difficult 18 months.

As well as an ongoing debate about what should be open to vote and what shouldn't, and how much information newly enfranchised members need to make decisions, there is anger, and some confusion, among a small number of activists around the process for choosing member candidates to the board. A sign of a healthy democracy, of course, is contested elections.

The Chair of the Group, Allan Leighton, is new in and an appointment that has been widely welcomed. For his part, he has explained that, as well as democratic, the Group needs to be profitable and successful; that is the best way in which it can serve its members.

It has all got rather oppositional, conducted bizarrely through the combined pages of the Guardian and the Daily Mail. Of course there are serious issues in hand, but why all these debates are being played out in the public domain it's hard to say. The risks are not just that the commercial brand of The Co-op is damaged but the very idea of democratic, mass customer ownership is opened up to question; whilst the only thing that ultimate owners, the members shoppers, hear little about is the vital work that needs to go into recovery of the Co-operative.

What should we make of all this? I think it tells us three things.

First, democracy can be messy. In a new system like this, the way things work and expectations are still being worked through. The passionate co-operative members currently sparring with the group executive are seeing what they can and cannot do in this new democracy.

Second, the Co-operative Group's democracy is beginning to work, even now, before the full membership votes take place. The elected members at the Group are using their powers to ask for changes and amendments. The Members' Council has called for action on product lines that would make The Co-op the most fairtrade retailer in the world, for example, and proposed a review of the Group's recently agreed purpose, albeit that proposal has subsequently been withdrawn for further work.

Third, the Group is looking like it might just be in the process of becoming a healthy democracy. A well performing co-operative combines quality management and vigorous democracy, both of which we have seen the Group develop over the last year at various levels. It is a new democracy and there will be more debate and contest to come, but this is a good sign.

In the end, perhaps, with the injection of a little old-fashioned co-operative responsibility all round, what we may be seeing is not the death knell of the Co-operative Group's democracy but the birth pangs of a new one.


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