Co-op reforms criticised for watering down Myners proposals

“We would urge members of the Co-op to look closely at the proposals laid out today and to consider carefully whether enough has been done to reassure them that the governance arrangements will provide the stability this organisation needs,” he added.

Ursula Lidbetter, the Co-op’s chairman, defended the mutual’s present board not implementing Lord Myners’ proposals, which called for a completely-independent board, in full.

“It was important to the members that they have a democracy. We are a co-operative we feel very different from a plc and so we should,” she said, insisting that the directors elected by Co-op members would be strictly vetted to ensure competence.

Ms Lidbetter, who will step down as chairman to make way for an independent, said none of the current directors would be on the new-look board when it is introduced next year.

In addition to the board overhaul, the Co-op will create a “Senate” of 10 to 15 members to oversee a “Council” of up to 100 tasked with protecting its values. If the proposals are passed by members at a special meeting at the end of the month, the 18 members of the current board will be reduced to nine while the new structure is implemented.

The Co-op has been plagued by a series of setbacks in the last 18 months, including the loss of its banking arm, and has been forced to sell off certain businesses to plug debt.

Euan Sutherland, the former chief executive, called the mutual “ungovernable” when he quit in March amid opposition to his attempted reforms.

Richard Pennycook, the interim chief executive who stepped up from his chief operating officer role following Mr Sutherland’s departure, said the reforms were a “crucial final step in relieving the challenges of the past”.

However, he would not be drawn on whether he would look to take on the chief executive role on a permanent basis.

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