Up to the Co-op to show sense over reform

Critics of the former City minister have set out to portray him as the man who would turn a cherished icon of British business into just another plc, with an identikit board and similar corporate governance. And, in a way, these critics are absolutely right. Lord Myners does indeed want to copy much of what makes some of our public companies so successful, but is that really such a bad thing?

Professionalism has received a bad rap in recent years – look at what happened inside the boardrooms of HBOS and Royal Bank of Scotland, say critics – but this is not really comparing like with like. The Co-op is a retailer and it has failed in its core market in a way that none of its peers has done, making disastrous acquisitions and operating with debts and costs no listed competitor would tolerate for long, if at all.

The Co-op hails its democratic tradition, but throughout this series of disasters ordinary members have had far less say in the running of the business than an ordinary shareholder in a plc. For one, a shareholder is allowed to attend their company’s annual meeting, a privilege afforded to only a handful of the Co-op’s seven million members.

Those who claim that changing the business could harm its ethical credentials have not been paying attention. Leaving the egregious near collapse of the Co-op Bank aside, which seems to have sold just as many dubious products as its bigger rivals, the shopping baskets of the Co-op’s customers contain a greater proportion of cigarettes and alcohol than any major competitor. Is this the ethical business members wish to defend?

Lord Myners has set out a sensible series of reforms that address the problems of a 150-year-old organisation facing a crisis. It is now up to Co-op’s hand-picked electorate to show they can be sensible, too.

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