Co-op Reform Critics Must Back Overhaul: Myners
Former City minister Lord Myners has warned the Co-operative Group will not survive unless members get behind his recommendations for reforming its governance structure.
His review's findings - which include the abolition of the group's 21-member board to be replaced by a slimmed-down body containing more expert, corporate figures - will be put before the Co-op's AGM in Manchester on May 17.
The damning 184-page report seeks to win over traditionalists "stuck in denial" over the need for change after regional membership boards and independent societies voiced opposition to his interim proposals in March.
Lord Myners later quit as a Co-op director after just four months.
The review followed a tide of pain for the Group, which recently revealed an annual loss of £2.5bn - the bulk of that put down to the continuing problems at the Co-op Bank, now in the clutches of US hedge funds after its rescue from near collapse.
In an interview with Sky News, Lord Myners argued the bank crisis epitomised the scale of the incompetence he had witnessed.
He said: "How the board of the Co-op two years ago thought it could acquire the branch businesses of Lloyds TSB is beyond imagination.
"I cannot imagine a group of people less equipped, less competent, to own and control a bank.
"It took me half an hour of sitting in my first board meeting of the Co-op to realise what a shambles the board was."
He spoke out against the culture of the Group as the bank's former chairman, Paul Flowers, was being fined after admitting drug possession.
The peer slammed the fact that the 15 lay directors on the current board were drawn from a total eligible pool of only 35 regional board members including an engineer, a plasterer and a retired deputy head teacher.
He said that apart from the lack of relevant skills and experience "this has not even been genuine democracy at work" - telling Sky's Dharshini David that every member of the board should go bar one member from the North West.
Ursula Lidbetter, Chair of The Co-operative Group, responded: "The Co-operative Group welcomes the report from Lord Myners and we are grateful to him and his team for producing such a detailed and comprehensive review so rapidly.
"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".
Lord Myners spoke of his hopes that the membership adopted change at the AGM.
He said: "I have no doubt that the Co-operative Group can over the next five years reverse a decline that started over 50 years ago. But I am less confident that it will choose to do so.
"Much will depend on the small number of 'elected democrats', less than one in 10,000 of the group's entire membership.
"Will they put their self-interest to one side for the greater good, acknowledging the collective failure of the current board and the crippling deficiencies of the entire governance system?
"I would say that the Group board and many on the regional boards are still stuck in denial over this near ruinous failure of governance, whereas the vast majority of ordinary members feel justified anger."