My attention has been drawn to the idea of ‘slow democracy’ which is being discussed in the US, slow democracy being an approach which “encourages us to govern ourselves locally with processes that are inclusive, deliberative and citizen powered”.
This sounds like something which cooperatives – and the broader community movement – might want to pick up. Details at this website.
The Co-operative Group’s old governance arrangement, where area committees (usually with a motley bunch of members all drawing some dosh) had almost no power but were supposed in some way to be in touch with grassroots customers, was never something which I felt worked well.
But the idea of reinvigorating the Group’s democracy and membership from the bottom-up is certainly something which needs exploring and I’m very interested to see that this is what was tried last Saturday in the Chorlton area of south Manchester, An experimental ‘cluster’ meeting brought together local members of the coop (ie shoppers) with staff, with the support of the Group’s membership team.
The event was arranged by Manchester Area committee, which (despite what I said in the first paragraph) is showing it has some real energy and ideas. They launched the Co-operative Springboard website last year to encourage debate about how the Group’s governance review could help create a ‘21st century co-operative’, and they are now keen to see the Cluster idea tried elsewhere. Go for it, I say.
Unhelpfully, perhaps, I was away on holiday last week in the run-up to the Co-operative Group general meeting last weekend which voted in favour of the new governance arrangements (just to remind you, these are in summary the arrival in the Board Room of independent business-types as non-executives, plus a new 100-strong members’ council). My holiday meant that that I didn’t have a chance to comment here on the last-ditch efforts led by Co-operative Business Consultants to build a coalition against the proposals, though I was interested to see that CBC had persuaded the original Rochdale Pioneers to email me to solicit my support. (Actually I’m not sure that nineteenth century cooperative history can be co-opted quite so easily: I’m pretty sure, for example, that CWS leader JTW Mitchell, himself from Rochdale, would have been very comfortable with the new governance arrangements. He was always impatient of any appeals to cooperative democracy if it got in the way of building the powerful CWS empire).
…the vote has taken place, and cooperative governance in the Group now means something different. I have two particular observations. Firstly, I think it important that careful public scrutiny is made of the appointment of the Group’s new Chair and non-executives. In other words, CBC and everyone else who cares about member control and democracy in the Group mustn’t relax. I agree with Pauline Green who is quoted in latest Co-operative News as saying “It is critical that right from the beginning the members of the new council take control of the monitoring of the next three years before there will be a review – and that they don’t suspend their critical judgement.”
The second point is that, whilst the Group’s cooperative credentials are very important so too is its competence as a retailer. It was disappointing to shop on holiday in a different Co-op Group store from my usual home-town shop, but to find there many of the same problems. For example, why was it the Budgen store round the corner which had shelves full of locally produced food whilst the Co-op just had the regular stuff shipped in from the warehouse? There are significant management issues with the Group’s retail offering which urgently need attention – but then I think we all know this.
“Take my proposals in their entirety or you’re doomed.” I am exaggerating Paul Myners’ ultimatum to the Co-operative Group’s Board on corporate governance reform earlier this year, but only slightly.
We now know that Myners’ proposal for a Co-op Group board full of the usual sort of independent non-executive directors is likely to be sweetened by a small number of places left open for representatives of ‘ordinary’ members (… as I predicted here at the time of the Co-op Group’s AGM). Whether a handful of ‘democrats’ can adequately prevent the Group for heading off in the same direction as all those building society boards notionally accountable to their members is debateable, but my prediction this time is that the compromise will be accepted.
What’s disappointing is that the presence of ‘ordinary’ people on the Co-op Board’s has been seen (pace Myners) as a problem. It could and should be seen as just the opposite – as potentially giving the Group a competitive business edge over non-cooperative competitors. (Admittedly, I accept that that word ‘potentially’ is necessary in this assertion).
I think we can now start to make an early assessment of Myners’ contribution to the Group during his short time on the Board. I fear that my verdict would be a negative one. I think Myners was too hidebound by his experience of traditional finance sector Boards and their way of doing corporate governance, and too autocratic in the way he approached his task at the Group. This is a pity: a leader with more sensitivity to cooperative heritage and culture could have led the movement towards taking a historically momentous step towards a more accountable and democratic way of operating.
I have just been invited to take my part in the Nationwide Building Society’s democratic process. Or in other words, the voting paper for the 2014 AGM has arrived in the post.
I will vote, of course, but I can’t say I’m very excited by the prospect. The way member control operates in the Nationwide (as in so many other larger building societies) is not an attractive one. We are invited to endorse – or otherwise – the board members already in place. There are no alternative candidates to select.
The board is, in short, a self-perpetuating one. In years where board vacancies occur new directors are co-opted and only subsequently presented to the membership for endorsement. This may well produce a board with some of the right professional competencies, but it doesn’t suggest an organisation where members’ voices can really be listened to.
Actually, Nationwide is interesting because there was a time back in the 1990s when independent candidates regularly stood against board nominees and were actually elected to the board on (from memory) three occasions. I remember covering the news when the first independent, Sheila Heywood, was successful in her election. Some of this interest by activists in the Nationwide was historical, coming from the fact that Nationwide was originally the cooperative movement’s building society.
Recent times have seen attempts at direct member candidacy in building society elections wither away (leaving aside for a moment the Ecology). It’s a pity. It’s also directly relevant to the debate at the Co-operative Group on future governance arrangements since Lord Myners’ recommendations propose a very similar arrangement for board elections as building societies.
In the meantime, back to my voting paper. I see that Nationwide’s chief executive Graham Beale has target remuneration of £2.31m for 2014/15, with a possible maximum of £2.74m. Curiously, these amounts are given by Nationwide in the booklet to members as £2,312K and £2,749K – is this because somehow that way they seem less gigantic?
With the media obsessing today about the Co-operative Group’s AGM in Manchester, I feel almost obliged to add my own short blog.
Journalists like a simple story, and have built up today’s event as a make-or-break occasion. It’s certainly significant, but only one step on the road to a new governance structure for the Group. My two predictions are these: the motions before delegates will pass, and the Myners proposal won’t in the end be implemented as it stands. What will happen after today is a period of further discussion (ie, compromise). What will emerge will be something which gives the regional coop societies more of a role and (I hope, although this is perhaps less certain) produces a board which is not simply made up of executive directors and traditional business-background non-executives but also includes a cohort of ‘ordinary’ elected member-directors.
I was at yesterday’s Cooperative Renewal conference, where ex-CWS chief executive Graham Melmoth weighed in to the debate. His comment on today’s event was as follows: “The [Special General Meeting] motion I think has sufficient elasticity to permit a short filtering process to be introduced into the Reform Architecture without unduly impeding progress, eg a small group of Members would be commissioned by the Board to review the Myners Report, reflect on it and produce a final blueprint”.
Elasticity is the key word here. In other words, there is still much to play for.
However, governance is just one aspect of the necessary renewal of the Group. I was arguing yesterday at the Renewal conference that a root-and-branch reform of the corporate culture of the organisation is even more important… and perhaps more difficult to bring about. More on that another day, perhaps.
British coops need to have a much better understanding of how coops in other countries do their member engagement and democracy, so let me tell you about the email which came through to me yesterday with the interesting title “Hey there, voter…”
The email is from Canada’s long established Mountain Equipment Cooperative (MEC), a chain of outdoor shops across the country. It’s a pure consumer cooperative, in that it sells only to members – or in other words, if you want to buy something in their shop you have to sign up first and pay your $5 membership. As a consequence among MEC’s several million members are some people like me who have stocked up on the odd bit of outdoor kit when we’ve been in Canada.
It’s election time for MEC, and fourteen members have put themselves forward for the four places available, a sign of a pretty healthy level of democracy. MEC being MEC, the candidates’ addresses combine information on their financial and business skills together with their outdoor credentials (“this passionately outdoorsy paddler/hiker/cycler/explorer will apply her all…”).
For the first time this year MEC’s existing Board is ‘recommending’ eight of the fourteen candidates (a change agreed by the membership last year). As MEC explains: “the Board, with the help of an independent consultant and the Nominations Committee (which includes non-Board members) assessed each of the nominees against this year’s priority areas and MEC values.” For 2014 the Board was looking for skills in relation to the retail sector, the supply chain, and IT.
I think this is a legitimate process in cooperative Board selection, always provided that the number of ‘recommended’ candidates exceeds the number of places. The danger otherwise is we end up with the sort of cosy club for the chaps which has been a feature of the UK building society Boardroom for so long.
Who shall I vote for? I haven’t quite made up my mind…