The benefits of mutual admiration for businesses - Rose Marley and Andrew Whyte


If the parties are looking for ideas that will inspire, then why not make it easier for customers and workers to take a stake and change how businesses are owned and run? Do you think if Thames Water was owned by its customers, it would pour sewage into our rivers? Likewise, do you think if postmasters had a stake in the running of the Post Office, they would have investigated issues with the IT system rather than blame and prosecute the postmasters?
That is why the Association of Financial Mutuals, the Building Societies Association, Co-operatives UK and the Association of British Credit Unions have come together to call on the parties to make it easier and to encourage more companies to become mutuals.
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Hide AdWith the mutual model, organisations are 100 per cent owned and managed by its members, with profits shared among members and reinvested into the business. There are high-profile examples including John Lewis and Nationwide Building Society, but there are thousands more mutuals, cooperatives and social enterprises that contribute nearly £90 billion, equivalent to 3.5 per cent GDP and over 400,000 jobs to the UK economy.


Through a clearly defined structural ownership model, mutuals and co-operatives can escape the whim of stock market movements, or shareholders prioritising short-term thinking. Trust, entrepreneurship and growth are encouraged.
However, the mutual model has come under unprecedented pressure, epitomised a couple of years ago by the protracted bid by Bain Capital to buy the insurer LV=. While that particular takeover was not successful, it highlighted the need for government to firm up its support for the mutual movement.
Recognising the troubles that have engulfed so many prominent investor-controlled companies in recent years, the government should take the lead in creating the right policy environment for member-owned organisations. With the general election outcome shaping the future government, there is a pressing need to review and amend existing regulatory framework and make it easier for mutuals to raise capital where necessary, such as by establishing a British Business Bank start-up fund for new mutuals and co-operatives.
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Hide AdAdditionally, extending the Competition & Markets Authority’s remit to include responsibility for developing and maintaining corporate diversity across every sector, and introducing workplace savings schemes in businesses with more than 250 employees, could further ensure a fairer and more prosperous economic future.
Government policy can and must unleash co-operative and mutual potential. We are calling for a meaningful covenant between mutuals and co-operatives, the Government, and society, based on a purpose-driven business model that delivers tangible benefits to our communities and wider society.
Rose Marley is CEO of Co-Operatives UK and Andrew Whyte is CEO at the Association of Financial Mutuals