The Co-operative Group has been cricised for its complex and unique three-tiered structure based around elected members. After it revealed £2.5bn losses today Retail Week examines the structure.
When former Co-operative Group chief executive Euan Sutherland threw in the towel in March, he slammed the business as “ungovernable” due to its complex structure.
The Co-operative operates food, pharmacy, funeral, electrical, travel and legal businesses.
It is the largest mutual in the UK with almost 8 million members and 80 Independent Co-operative Societies and prides itself on being ‘open to everyone’, having concern for the community and operating a democracy.
The group board holds the highest level of power in the mutual and is led by chair Ursula Lidbetter. It has 20 directors on the board, 15 of whom are elected from the seven regional boards, with a representative from each region.
There are also five elected representatives from independent co-operative societies that are members of The Co-operative Group, such as Midcounties or Midlands. The independent Co-operatives hold 22% of the votes. Lord Myners held the role of independent director before handing in his resignation last week following criticism from members over his reforms.
The group board is responsible for appointing the chief executive, setting standards in its governance and determining the strategy of the group with the executive board. It also has three subsidiary boards which separately look after Co-operative Food, Co-operative Banking Group and Co-operative Specialist Businesses.
Executive - made up of seven non-elected members, it is currently headed by Richard Pennycook, who took on the role on an interim basis following Euan Sutherland’s departure last month.
Retail executive - headed by Steve Murrels
The regional boards hold 78% of the vote. Each individual board’s stake changes annually dependent on their trading performance. They run the businesses in their region and look after their store estates. Regional boards are made up of elected area committee members (see below) who have been on the committee for at least two years.
The area committees is made up of 10-12 elected members from the community and serve for around three years. There are several committees on each regional board and there are 28 committees in total. Co-op Group members can stand for election to the committee after they have been a member for a year.