Co-op board exercised “facade of control”
In his widely-publicised review of the Co-operative Group’s problems, Lord Myners has come to the “inescapable” conclusion that the present governance architecture and allocation of responsibilities at the mutual is not fit for purpose, having placed “individuals who do not possess the requisite skills and experience into positions where their lack of understanding prevents them from exercising the necessary oversight of the Executive”.
Lord Myners identified a “façade of control” exercised by individuals “drawn from an excessively narrow pool of entrenched incumbents on the Regional Boards of the Group”.
The report states that a “deeply flawed system of elected member representation has consistently produced governors without the necessary qualifications and experience to provide effective board leadership and to monitor, challenge and provide direction to management”.
The review’s first proposal is the creation of a new Group Board made up of an independent chair with no previous association or involvement with the Group, six to seven independent non-executive directors (NEDs) and two executive directors.
The non-executive directors will need to have the skills and experience of NEDs sitting on the boards of the Co-operative Group’s primary competitors.