High profile business fiascos, such as Coca Cola’s maladroit ‘new Coke’ attempt to change the taste of its product in 1985, form the basis of case studies for business schools around the world. Will business schools now also include the Co-operative Group’s recent decision to abort its 2008 “The Co-operative” rebrand among their case studies?
The 2008 rebrand was a major event for the British co-operative movement – and an expensive one. At the time, it was seen as confirmation that co-operatives were putting behind them their reputation for shabby stores, expensive prices and poor quality goods. With great drum-banging, the Co-operative Group announced that it had secured rights to use Bob Dylan’s Blowin’ in the Wind soundtrack for its TV advertisements.
So what, if business schools pick up on this latest twist to the co-operative story, will they consider the real fiasco? Will it be the 2008 rebranding exercise, abandoned so quickly? Or will it be the 2016 decision to revert to the old turquoise ‘clover leaf’ logo, a decision which I’d call an exercise in de-branding?
You know, seeing the old logo back in my local store, I have a horrible feeling that it may be the latter.
Let’s talk a little about the current ballot papers which have gone out to Co-operative Group members, or at least to those who are eligible to vote (those members who have spent £250 or more in the last financial year or patronised other Group-related businesses to a comparable extent).
Firstly, this is an absolutely enormous step forward in bringing proper member engagement and an element of member control to the Group, Britain’s largest coop and (in 2014) the 27th largest coop in the world. Compared with the previous arcane procedures, this represents a transformation.
I have – naturally enough – some criticisms. Very little preparatory work was done to get members to expect these ballot forms, and the ballots themselves are complicated. I suspect that many members will give up. That’s a pity.
It’s frustrating to be able to vote yes or no to a motion reducing Group political donations from £1m to £750,000 – with a ‘no’ vote meaning that no political donations will be possible at all. I do however understand the commercial context in which this motion was drafted.
We have the opportunity to vote yes or no for the independent non-executive directorships, but that’s all. There are the same number of candidates as places. That’s not great. There is, however (and unlike last year), a genuine election this year for the two Member Nominated Directors.
I am not at all sure that the elections for regional delegates to the Members’ Council should have been by transferable vote: it’s almost impossible to rank candidates meaningfully when you know very little about them, and in this context transferable voting seems to me a voting system which is paradoxically less democratic than a simple ‘put X against up to X candidates’ ballot paper.
But it’s early days yet. This year’s elections are a start. It’s primarily the job now of the Members’ Council to build on this start.
The future of the British cooperative movement was to be found in a scout camp site in Staffordshire this weekend.
Well, I’m exaggerating. But nevertheless this year’s workers coop gathering which took place under canvas on the outskirts of Stone was a lively affair, primarily made up of people from the demographic that we’re supposed to call the ‘millennials generation’. Or in other words, people a lot younger than me.
Workers coops have historically tended to be at the cutting edge of cooperation, and certainly the weekend suggested that the radicalism is still there, in terms of both politics and ways of organising collectively.
My contribution was to lead a workshop on the very early history of workers coops (‘productive coops’) in Britain, based on my recent research. Lots of questions, lots of discussion and afterwards I was rewarded with a tasty meal of vegan rissole and salad (the ingredients kindly donated by workers coops in the food business).
Never write off cooperatives as yesterday’s news.
I have chosen in this blog to focus specifically on issues related to cooperative and mutual businesses, but I sometimes wonder whether that’s a mistake. What I mean is that, while those of us associated with the cooperative world ponder issues such as, say, member democracy or access to capital, the rest of the business world cheerfully gets on with its work of making money for investors and shareholders.
I think we need to look beyond the coop sector sometimes, and to start intervening in the way that we allow conventional companies to operate. As societies we permit company law to grant limited liability to businesses run simply to maximise profits, while requiring in exchange for this very generous concession almost no commitment from business to contribute to the wider social good.
Prem Sikka, professor of accountancy at Essex University, has a good piece in today’s Guardian. Talking in particular of the British retailer BHS now in administration, he describes the way that directors there were able to treat BHS as their private fiefdom, with no concern for employees, pension scheme members, supply-chain creditors or other stakeholders.
Here’s his conclusion: “UK company law needs to be modernised. Companies are not the private property of shareholders. Rather they should be seen as public institutions that help to advance common interests, and create and distribute wealth. Directors should be seen as trustees of stakeholders rather than as agents of shareholders advancing sectional interests…. The current model of corporate governance needs to be swept away and replaced by stakeholder representation on the boards of major companies.”
I absolutely agree. Read his piece yourself here.
An interesting press release arrives from the Spanish workers’ cooperative organisation Coceta which has today signed a partnership agreement with one of the two main trade union federations in the country CC.OO. The aim is to work together to try to turn failing conventional businesses into cooperatives, as well as to convert businesses where the owner is retiring into worker-owned ventures.
The two organisations say they want to work more closely together with the aim of “not losing a single further worker’s job”.
Cooperatives and unions are increasingly rediscovering their common roots. Let me remind you of the 2013 ILO report on this theme Trade unions and worker co-operatives: where are we at? It’s worth a reread.
I was at the AGM last weekend of a community-based cooperative I’m a member of, one that is steered by a small group of volunteer directors. 2015’s trading results were not, to be blunt, great and as a result the balance sheet looked less perky than it might have done (although more positively we were advised that sales since January have been satisfactorily above forecast).
I thought the chair and directors did a good job in briefing members (there were about fifty of us present) and in answering the questions. I raised a couple of points, one on the current strength of the board and one on staffing costs. Both questions I thought needed to be asked, but I hoped when I raised them that our directors didn’t think that I was criticising their hard (and unpaid) work on our behalf.
Directors have responsibilities to their members. But in a well-run cooperative members have duties and responsibilities too: among other things, to read the accounts and the directors’ reports carefully and not to be frightened of asking for more information.
Without an actively engaged membership, a coop is already on the path to decay. Members: ask those difficult questions! Directors: welcome those difficult questions!
This is the time of year when I am invited by the building societies in which I have savings to participate in their democratic life. It’s, frankly, not much of an invitation. Building societies may be technically member-owned, but the ballot paper which comes round invariably allows me to vote (or decline to vote) for exactly the number of directors for which there are vacancies. It has been many years since I have been aware of contested elections for the boards of any of the major building societies and even more years before an ‘unofficial’ candidate not supported by the existing Board was elected (this was at the Nationwide some twenty years ago).
The usual device used by building societies is to bring in a new director by co-option, who then serves until the next annual election – at which point of course their name is added to the ballot paper in an uncontested election. It is, I’m sorry to say, a poor recipe not only for democracy but also for building society diversity and renewal.
So my heart sinks when the annual report and ballot arrives from the Ecology Building Society, and I find that the Ecology has followed industry norm: no contested election for the board and a new director brought in mid-year as a co-optee who we now have to endorse. The Ecology this week announced strong performance results, and I am pleased at their success. They also hold attractive green-themed AGMs which usually have good attendances. But I would be even more pleased if the board proactively worked to attract more candidates than places in future board elections.
Incidentally, the small and dedicated (if sadly all too powerless) Building Societies Members Association is still going after more than thirty years of campaigning for some real member engagement in societies. They have recently been trying to help get independent candidates on to ballot papers, not an easy task. They deserve to be commended for their perseverance.