The news that investors have backed the Co-operative Bank’s latest capital raising round gives me mixed feelings.

The news that investors have backed the Co-operative Bank’s latest capital raising round gives me mixed feelings.

It’s encouraging to see the organisation being supported, but worrying that its overall stake in the bank is approaching the threshold below which it would be allowed to abandon its ethical priorities.

While the group as a whole struggles to define a new management ethos after the ‘Crystal Methodist’ debacle, I hope the pragmatism that has been forced on its banking arm won’t inspire compromise across its other operations.

I’ve previously been involved in running co-operatives, so I know how difficult it can be to walk the line between mutuality and competency. With that in mind, Lord Myners’ scathing report about board inadequacies came as no surprise.

Co-ops work well as small organisations. Achieving agreement between more than a handful of highly principled individuals is akin to herding cats.

In conventional company structures, such challenges can be overcome by a visionary boss and some horse trading. But in a mutual you’re driven by ideals and constitutions that define your existence - something I feel the Co-op’s retail management has failed to appreciate for a while.

In a recent TV ad, fellow mutual Waitrose symbolised the virtues of staff ownership with a carrot grown by a young gardener, while the Co-op cited a layabout student as a reason to buy its cheap bacon. It’s hard to imagine how it could be any further off-message without Jeremy Clarkson providing the voiceover.

There’s an assumption that the retailer’s principled stance goes without saying, but I think it’s something it needs to shout more loudly about than ever before if it’s to survive the banking fallout.

Richard Pennycook needs to bury recent history under a renewed commitment to a proud ethical heritage. Maybe a new slogan could bring members and staff together. Something like “Forget Flowers – remember our roots”.

I always knew I should have gone into advertising.

  • Ian Middleton, managing director and co-founder, Argenteus