Proposals for Reform of Co-operatives UK

Co-operative Business Consultants (CBC) made several proposals for reform of Co-operatives UK, at its AGM and Co-op Congress, held in Birmingham in June 2014.

Why Co-operatives UK?
In November 2013, as news of the Co-operative Bank crises was breaking, Co-operatives UK held a conference. Jo Bird and others from CBC thought, “what a good opportunity to discuss a significant issue”. But the vice-chair of Co-operatives UK told us this was not the time or place to talk about the Co-operative Bank. Partly as a result of this missed opportunity, Co-operative Business Consultants, organised two national conferences on Ways Forward for the Co-operative Movement. 260 people took part. The conferences provided much needed space for open and honest debates.

There are some parallels between the Co-operative Group and Co-operatives UK. They are from the same era, have the same location and share a similar culture.

While the recent period has been disastrous, it is also an opportunity to learn and to change. CBC is proposing ways forward for Co-operatives UK.

Co-operatives UK is a co-operative, we are members of it. Co-operatives UK is a leadership body for Co-operative Movement and it should lead by example.

CBC’s Reform Proposals are:

1. Co-operative Identity
It is problematic that shareholder owned organisations and brands, such as The Co-operative Bank and Co-operative Travel, are allowed to trade using the co-operative identity. It is also problematic that The Co-operative Bank holds membership of Co-operatives UK.

Co-operatives UK should review which organisations should be eligible to use the name “co-operative”. This review should include a full and open consultation with members of Co-operatives UK and the International Co-operative Alliance – the ultimate guardians of co-operative values and principles. Co-operatives UK should report back on this review of Co-operative identity no later than Congress 2015.
The Chief Executive questioned whether Co-operatives UK had a mandate to play a self-regulatory role on the co-operative identity within the Co-operative Movement. A poll was taken of members at the AGM, which was overwhelmingly in favour. The Chief Executive, Secretary and Chair agreed that a mandate was established by members at the AGM, for Co-operative UK to review which organisations are eligible to use the name “co-operative”.

2. Database
A key challenge for the credibility of the Co-operative Movement is the robustness of Co-operatives UK’s databases of co-operatives and community shares societies. Work in the North West region showed around 25% were no longer co-operative businesses. Co-operatives UK should conduct an audit of its database.
The Chief Executive outlined the current methodology used for the database. Many members of Co-operatives UK agree that the data lacks credibility. Some suggest that the annual Co-operative Economy report should be abandoned.

3. Co-op Sector Diversity on Board
Co-operatives UK needs a competent board with diverse experiences. Currently, directors from the Co-operative Group hold 31% of board seats, and the retail consumer sector comprises 75% of the Board. Co-operatives UK is missing valuable contributions from other sectors. Co-operatives UK is conducting a governance review and CBC proposes that all members, and some potential members, are consulted and engaged in this review. We need to create a genuine apex body for all co-operatives in the UK.

4. Reduce reliance on the Co-operative Group.
Members need to up our game and make meaningful contributions to Co-operatives UK. The Co-operative Group contributes around 25% of income for Co-operatives UK, which can no longer be overly dependent on one member.

5. Focus on members’ needs
Co-operatives UK needs to focus on meeting the needs of its members. It must be careful to avoid management capture that has so afflicted the Co-operative Group.

6. Transparent trade with members
There needs to be a transparent procurement policy so that members know how to bid for contracts. Only 25% of Co-op UK’s purchases are made through other co-operatives. Trade with members is too low.

7. Harness enthusiasm of individuals
Co-operatives UK should be a rallying point for all who support the co-operative business model. Not just a trade association but a campaigning body. It should consider a way of allowing individuals to be members, through another co-op for example, and find ways to harness the enthusiasm of individuals.

8. Learn from the international co-operative movement.
Co-operatives UK should invite speakers and delegates en masse to events and conferences. There should be easy opportunities for study visits and webinars. Co-operatives UK should benchmark its performance against apex bodies in other countries, such as Legacoop in Italy.

In summary
Co-operatives UK needs to change its culture. By the time of Co-op Congress next year, Co-operatives UK needs to have made some changes. It needs to have more diversity on its Board, be stronger and establish a clear co-op identity. There needs to be more openness. It needs to have taken a stand on the issues that are currently dividing us.

Jo Bird
Co-operative Business Consultants
July 2014

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