THE CO-OPERATIVE Group’s governance system will be shaken up by Lord Myners, the firm said yesterday, as it seeks to make its democratic system more suitable to modern business.
Under the current setup the entire board of 20 non-executive directors is elected by Co-op members, with no requirement to have external or professional directors.
Lord Myners said he wants to retain the democratic structure to keep members in charge and maintain the ethical culture at the group, a key selling point. But he is also expected to bring in a structure where more business experience can be brought to bear in overseeing the executive team.
“We have to drive ourselves to say what is it we can do as member owned company that a competitor would not be able to do? And that is a better value proposition, a better service proposition, and a longer-term view,” he told City A.M.
“Being owned by the membership means the Co-op is not at beck and call of the stock market each quarter. But it can also lead to lethargy and a shortfall in standards, so we have got to apply self-pressure.”
However, the peer will not change the way the Co-op Bank’s board is structured.
Although the latest governance scandal revolved around ex-chairman of the bank Reverend Paul Flowers, the Co-op Group will soon lose its majority ownership.
As part of the bail in of bondholders the bank has a new chairman and chief executive and does not fall under Lord Myners’ remit.
The former government adviser will be paid a nominal sum of £1 per year for the role, saying he supports the Co-operative model and wants to help turn the business around.
He has also been appointed as a non-executive independent director and will stay on the board after he has completed the review.