04 September 2014
The Co-op Group has voted in radical governance reforms at its Special General Meeting, which is ‘better late than never’, according to a business academic.
Speaking to Governance + Compliance, Professor of International and European Business Law at University of Hull, Christopher Bovis added: ‘A new start was long overdue and needed to restore investor confidence. A new system is necessary for regulatory purposes in order to allow the proper function of the Group in a modern era.’
Manager Director of GoodCorporation, Leo Martin said that ‘a smaller board with more independent members should provide greater efficiency and objectivity’.
However, he added that the ‘worry here is that the Co-op model, comprising a hundred-strong committee, overseen by a smaller senate, seems unwieldy and runs the risk of becoming cumbersome and ineffective’.
Chair of the Cooperative Group, Ursula Lidbetter said: ‘These reforms represent the final crucial step in delivering the change necessary to return the Group to health … [and that] voting for real change [has] demonstrated our co-operative values of self-help and self-responsibility’.
Commenting on the Group’s future, Professor Bovis says: ‘If the Cooperative Group is going to survive, it needs to refocus on its business strategy, reduce its exposure to unknown markets and install a corporate governance regime which is fit for purpose.’
A majority of 83% voted in favour of adopting a new Rulebook of reforms, which includes the creation of a smaller, more effective board of directors and a more inclusive structure for members. This is supported by a move to one member one vote, allowing members to vote on matters concerning the future of the Group, including the election of directors, significant transactions and to participate in the Group’s general meetings.Click to read our previous post on the Co-op Group’s governance reforms for a more in-depth break down, of what were then proposed reforms.