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Voting for Co-Op Group to overhaul governance



Members of the Co-Operative Group Ltd have voted for an overhaul of the governance structure of the company.
This comes after the group suffered its worst crisis in 150 years, with an annual loss of £2.5billion.

Members approved the proposals for an elected board of directors, a system based on ‘one member, one vote’ and stringent rules as protection against demutualisation, BusinessWeek says.

The proposals were recommended by Paul Myners, a former UK Treasury Minister.  He warned that the group was in urgent need of governance change or it may run out of funds.
 
The group is involved in various business ventures, from supermarkets to funeral parlours and since it was necessary for it to bail out its banking unit due to compensation, bad loans and restructuring, it saw a decline.

The group has around 8 million members and 80000 employees.  It dumped a plan to purchase 630 Lloyds Banking Group Plc branches as its capital problems started emerging and the report from Myners stated that the board did not have adequate experience. After the vote, a sub-committee will commence writing new rules based on the new principles.

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