Pauline Green writes:
So said a
Guardian leader column trying to put some sense into the changes at the top of
the Co-operative Group. But the recent
convulsions at the heart of the group threaten the very future of this
difference, and what it means to be a co-operative.
Unlike most businesses where the bottom line is
profitability, the rhythm of a co-operative is different. It has a triple
bottom line – investment in the business, an economic return to members, and
care for the community.
So yes it is a business, and it must make profits, but
it does not need to maximise profit at the expense of member interests.
Members own their co-operative. This is the
critical relationship that Euan Sutherland, who recently resigned as chief
executive of the Co-operative Group – claiming that it was ungovernable – struggled with.
The group
might look ungovernable when viewed through the prism of a stock market listed
business. But is it inherently so? Certainly not.
I urged a different governance approach in 2008
when the two largest consumer co-operatives in the UK merged to create the
Co-operative Group and introduced a new constitution.
So changes are needed.
But there are other huge, complex and successful co-operative business
in other parts of the world.
As someone who has played a senior role in the
UK's co-operative movement for some 30 years, and currently chairs the
International Co-operative Alliance, I have watched with increasing concern and
despair as, first, the Co-operative Bank fell out of the movement's hands, and,
second, the relationship between executive management and lay members of the
Co-operative Group fell apart so spectacularly.
Right through the financial collapse and
recession, the co-operative movement has been growing across the world.
Owned
by nearly 1 billion of the world's citizens, employing tens of millions around
the world, with 25% of the global insurance market, providing electricity to over
42 million consumers in the United States, and with its largest 300
co-operative and mutual businesses having a combined turnover of $2.1 trillion,
co-operatives already play an important role in the global economy.
In many
countries they are the backbone of the real economy – supporting local
communities, urban and rural, through a huge worldwide network of small
enterprises in local agriculture, community finance and just about every sector
of the economy.
This is not a "worse" model of business
but a different model, that provides the distinctive rhythm of the co-operative
pulse.
Yet after the coverage of the group's problems, you could be forgiven
for thinking the co-operative model is not suited for modern business.
If that
is the case, how is it that the investor-led business model – which failed so
disastrously for us all during the global financial collapse – is still
suitable for the global banking sector?
The current problems at the Co-operative Group
come down to a culture clash between the management and the members, who own
it.
Leading a co-operative business is a complex mix of professional skills,
respect for the participatory model of ownership, and adherence to our globally
recognised principles.
It requires someone prepared to understand and work with
the grain of a business that has a quite different raison d'etre from the
predominant business model in the UK.
Over the last year, as the new management at the
group rightly moved to deal with the huge problems presented by the
Co-operative Bank, and its potential impact on the group itself, two things
became clear.
First, at a time when group members should have
been consulted about how they wanted their co-operative to develop, the exact
opposite happened.
Virtually all those with knowledge of how to manage
decision-making in a co-operative were removed from the most senior level.
This
was compounded by moving the entire new executive management team from the
Manchester head office to an office in London, thereby undermining confidence
and morale in Manchester, and isolating the executive group from everyday
contact with the remaining vestiges of co-operative knowledge and experience.
Second, there appeared to be a move away from the
acknowledged conceptual framework of co-operation. There was no talk any longer
of the "principles and values" of the movement, but of "ethics
and values".
This may seem like nitpicking, but to tinker with or omit any
of these principles is deeply worrying precisely because they are the
co-operative ethics and values: to change them is to stop being a co-operative.
The seven global principles are at the core of the co-operative difference and
are a major unique identifier in the corporate world.
These two problems were compounded by the
ill-judged "Have Your Say" survey, which crystallised fears among
members about the downgrading of their ownership rights by asking leading
questions that appeared to be an attack on principles such as an economic
return to members and member control.
The media coverage of the unexpected
early release of the report into the Co-operative Group's governance by Lord
Myners exacerbated these concerns.
If ever there were a time for the co-operative
movement to show its mettle, this is it.
The group has serious problems: the
recruitment of the next chief officer is more vital than ever.
The new CEO must
have an understanding of, and commitment to, co-operative values and
principles, and demonstrate the capacity to repair the damage done to the
relationship between members and the executive.
For this to work, the eyes of
the Co-operative Group need to lift upwards, beyond internal personality
politics and power struggles and towards the thriving co-operative movement in
the UK and internationally.
We have the right people in the movement to
manage our businesses. We have the right models in the movement to govern our
co-operatives.
If we put them together we can have a successful Co-operative
Group once more.
No comments:
Post a Comment