Co-op Group Reveals Major Restructure
The struggling Co-operative Group has announced plans for reform of its governance structure.
It said the executive board would be reduced from the current 18 positions to an interim of nine, ahead of a final tally increase to 11 members.
The changes will occur as soon as new rules are registered.
It also said the smaller board would consist of members "qualified to lead an organisation of its size and complexity".
The plan has been formulated to help protect against de-mutualisation of its assets.
The move comes after "disastrous" results for the mutual.
Last year a £1.5bn capital black hole was discovered in its banking arm.
In April, the group revealed a 2013 annual loss of £2.5bn - the worst result in its 150-year history - on the back of a loss of £529m in 2012.
The Co-op also plans to give the group's members appropriate powers to hold the board properly to account for performance and ethics.
It said recruitment of new board members would begin immediately.
The proposals, which follow a period of consultation with the society's members, have been reflected in a proposed new rule book and will be put to a vote at a special general meeting on August 30.
Co-op Group chairwoman Ursula Lidbetter said: "These governance reforms represent the final crucial step in delivering the necessary change to restore the group and return it to health.
"This has been a process built on co-operation, focusing above all on creating a society where every member has a voice in shaping the group's future.
"I would like to thank our members for their engagement in building a governance structure that strengthens the society and enhances member engagement and our unique democracy."
In July, the mutual agreed to sell its pharmacy division to Bestway for £620m, and just days ago a deal was agreed to sell its farming business to the Wellcome Trust for £249m.
The changes are based on suggestions put forward in a review by Lord Myners, who has since resigned as a director - just months after his appointment.
The ex-City minister warned of an existential threat to the mutual unless it overhauled its "dysfunctional" board.
The peer said it was apparent from his first board meeting that members lacked business ability to properly address the complex issues faced by the group saddled with £1.4bn of debt.
The trimmed down Co-op now intends to refocus its strategy primarily on its food shops, funeralcare and insurance businesses.
"They appear to have listened to members' views that overhaul of the Board was needed," Institute of Directors corporate governance adviser Oliver Parry said.
"Nonetheless, the overall governance structure at the Co-op remains somewhat confusing.
"Indeed, the Co-op group needs to adapt its governance model to the realities of the modern global economy, just as private sector boards have needed to become more professional over the last decade."