Co-op Group votes through reforms

Written By Unknown on Sabtu, 30 Agustus 2014 | 19.21

30 August 2014 Last updated at 13:11

Members of the troubled Co-operative Group have voted in favour of reforming how the business is run.

The group has been in turmoil since a £1.5bn hole emerged in its finances last year, forcing it to sell off parts or all of its insurance, pharmacies and banking divisions.

Changes to the structure of the board were proposed, but had met stiff resistance from some key figures.

But 83% of members voted in favour of the changes.

The plans were proposed by former City minister Lord Myners and were accepted in principle in May.

Lord Myners had blamed the structure of the Co-op Group's board for much of the chaos surrounding the business.

Among the changes:

  • A group board of 11 people will be set up, with a majority of independent directors. This has been reduced from 20 people previously
  • The board will comprise an independent non-executive chair, five independent non-executive directors, two executive directors (including the group chief executive) and three member-nominated directors
  • A council will represent members and act as the group's guardian. The body, to comprise a maximum of 100 members, will have power to hold the group board to account
  • A senate, elected by the council, will help co-ordinate the activities of the council and act as a nexus for interactions between the council, the board, the executive and members.

Ursula Lidbetter, chair of the Co-operative Group, called it a "momentous and defining moment".

"These reforms represent the final crucial step in delivering the change necessary to return the group to health," she said.

Following the discovery of the £1.5bn black hole in 2013, a deal was reached which saw the wider Co-op Group cede majority ownership of the bank to bondholders, including a number of US hedge funds.

In a separate scandal before the bank had to be rescued, revelations emerged about the bank's disgraced former chairman Paul Flowers, who pleaded guilty to drugs possession in May.


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