Former City minister Lord Myners today laid out his plans for saving the Co-op with a final broadside to traditionalists “still stuck in denial” over its failings.
He admitted he is “less confident” the group will choose the radical decisions he believes are needed to overhaul the current deficiencies in governance at the ailing mutual, which last month reported annual losses of £2.5 billion.
“Unless the group takes urgent steps to reform its governance and generate sustainable economic value, it will run out of capital to support its business,” Myners said.
The basis of his proposals, which include the abolition of the group’s 21-member board to be replaced by a slimmed-down body to take commercial decisions, will be put before the Co-op’s annual meeting in Manchester on 17 May.
In his damning report of the way the group is run, Myners, who recently resigned as a Co-op director, said: “Radical decisions on governance structure need to be taken very soon – and with resolution – if the Co-op, as my mother knew it, is to be saved.
“The decision lies in the hands of the elected democrats. I have done all I can do.”
The report comes days after the running of the mutual was sharply criticised in a review by Sir Christopher Kelly into the near-collapse of its banking arm.
The bank faced near-collapse last year after the discovery of a £1.5bn hole in its balance sheet, and had to be rescued by bondholders in a move that saw its parent group’s stake reduced to 30 per cent.
In today’s report, Myners sets out three specific “reform objectives”, the first of which is to produce a “highly competent and qualified” board.
The Co-op must also make sure “genuine co-operative values” are embedded in its future governance structure, and that the benefits of being a member are not limited to a “tiny and potentially quite unrepresentative body of elected members”.
In response, Co-op chair Ursula Lidbetter said: “The board of the group has made clear its commitment to far-reaching and fundamental reform of our governance.
“A resolution containing four key principles on reform is being put to members at a general meeting in May and we will build from there to ensure we put the right changes in place.”