Elsewhere: Governance in cooperatives

Over in the Co-Operative movement there are similar debates to those in our sector about the professionalization and corporatisation of democracy. Here writer and blogger Andrew Bibby reflects on the Myners repoort on Governance in Co-Op bank and floats some alternatives.

Pretty well everyone involved in the cooperative movement thinks that the Group’s governance structure needs reform, but that’s about as far as consensus goes at the moment. One of the problems is that many activists fear that governance reform is effectively a euphemism for a comprehensive sell-out of cooperative principles, leaving management in charge of a business which would rapidly become almost indistinguishable from a plc. Some of the voices raised after Myners’ initial report come from this perspective. These get muddled, though, with special pleading from cooperative apparatchiks who have spent their lives working their way through the democratic ranks and now have much to lose (in terms of both power and money) if their role in the Group’s governance is reformed.

An intelligent debate becomes more difficult when the enemies of the cooperative movement are also actively at work in the media and elsewhere in trying to do down the whole idea of a democratic cooperative business model.

What’s the right way forward? Personally, I am rather more interested in the idea of a dual governance structure for the Group, with a members’ supervisory board and an executive board, than the Board of the independent Midcounties society (a group who are usually at the more radical end of things, but who are leading the battle against this proposal of Myners). There are, I think, some successful examples of dual board structures working well for larger cooperatives abroad, where the members’ board acts as the guardian of the organisation’s strategic adherence to cooperative principles. And just consider Britain’s building societies for a moment: isn’t it possible to imagine that a large society such as Nationwide might actually be more accountable to their members if its board had a members’ supervisory board watching over its actions – and the scale of its directors’ remuneration?

Britain’s cooperative movement has become remarkably insular and is almost entirely ignorant of how coops abroad do these things. So an absolute must-read in Johnston Birchall’s latest report for Co-operatives UK, The Governance of Large Co-operative Businesses. As Birchall says in his report “we need to engage in some serious mutual learning on the question of how to ensure member-centred governance in very large co-operatives”. I concur. And we urgently need much more research work undertaken internationally. Even with Birchall’s considerable academic knowledge, I still feel that we aren’t yet at a position where we know just how well the managements of large coops around the world are working to meet their members’ needs. Some of the coops mentioned in his report have, I suspect, governance structures just as rackety as the Co-operative Group’s own practices

Overall, there’s a lot I find valuable in Lord Myners’ report. But I have one difficulty with his approach – his proposals are focused solely on a top-down approach to governance reform.

If the Co-operative Group is to change, there also needs to be bottom-up reform. The Group’s shops need to be radically different in their relationship with their customers than the competition.

I see a lot of my local coop. I shop there pretty well every day (it’s my corner shop). I chat with the staff. I bump into friends. I sometimes bemoan the stocking disasters (there was even a time when the shop ran out of potatoes). But my close relationship with my shop does not have any link to my distant relationship as a member with the Group. Here’s my suggestion: Area Councils should go. Members should be invited to identify with their local shop. There should be meeting of member-shoppers at least every year, where we’d be given crisps and something to drink and get to talk to the store manager and an appropriate more senior member of staff.

We’d probably moan a bit, but we’d also contribute good ideas, which would make the shop better. And we’d feel engaged. I’m proposing to call my idea the ‘Cooperative Risorgimento’: it sounds better than ‘cooperative resurgence’. (And maybe if it happens Garibaldi biscuits will come back on the shelves, too).

Writer and journalist Andrew Bibby comments on cooperative business here

NUS and the Co-Operative Party published an interesting pamphlet on Students’ Unions as co-operatives back in 2009- it’s available here

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