Former city minister Lord Myners has said the Co-operative Group needs radical reform including smaller boards and greater attention to profitability.
Lord Myners' report slammed the Co-op's governance structure, concluding it had a "manifestly dysfunctional group board."
In what would be a significant departure from the Group's 150-year history, the report recommended that a smaller board be comprised of members with business experience.
A separate council led by the organisation's members would be established to give advice relating to the Co-op's ethical concerns and values.
The new board would be slimmed down from its current form, which includes 20 Co-op members, to up to seven non-executive directors plus the finance director and chief executive.
Lord Myners highlighted the fact that if the Co-op was to successfully maintain its spending on social programmes, it would need to reduce its existing debts and increase profits.
The performance of the Co-op in recent years has manifestly failed to match up to that standard, according to the report. Speaking to Radio 4's Today programme, Myners said the "Co-op has successfully destroyed £3bn of value built up over 150 years in the last four years."