360° Coverage : A Crisis Of Leadership At The Co-Operative Group Is Also A...

2 Updates
A Crisis Of Leadership At The Co-Operative Group Is Also A Crisis Of Values
Photo Credit: Forbes Business

A Crisis Of Leadership At The Co-Operative Group Is Also A Crisis Of Values

Apr 11 2014, 6:15pm CDT | by

A crisis of leadership and corporate governance at  Co-operative Group, the UK’s largest mutual business, has been making a lot of people very agitated. It is not just because of a litany of...

Filed under: news

 
 
 

22 weeks ago

A Crisis Of Leadership At The Co-Operative Group Is Also A Crisis Of Values

Apr 11 2014, 6:15pm CDT | by

A crisis of leadership and corporate governance at  Co-operative Group, the UK’s largest mutual business, has been making a lot of people very agitated. It is not just because of a litany of unfortunate events, but because it represents the clash of two worlds. How that clash is resolved will be critical to business, important to the banking sector, and could have a wider impact on thinking on corporate governance today.

Events are fast-moving, and the latest tonight is talk of new investors in the Co-op Bank. But although the financial urgency is about the bank, and much of the drama has been provided by its ex-chairman, the Reverend Paul Flowers, there is  more at stake here.

The Co-operative movement , which began in the UK in the mid 19th century in the north of England, was born of a desire for collaboration around the combination of buying power and the control of quality. The Co-operative Wholesale Society of 1863, which came to be known as the Co-operative Group, today claims almost eight million members, 90,000 employees and 4,500 shops. Its website says it has annual sales of more than £13bn.

Although it now owns just a 30% share in the bank, the C0-operative Group’s broader interests span food, pharmacy, funeral care, electricals, travel and legal services. Its results are out next week.

MidCounties, the largest of the Group’s independent societies, has more than 10,000 employees and revenues of £1.2bn. It has just  been recognised with a prestigious 4 star rating in the UK Business in the Community’s annual benchmark of responsible business, the Corporate Responsibility Index (CR Index). It has also been a vocal opponent of plans for governance reform put forth by Lord Myners, the senior independent director on the board of the Co-operative Group, which preceded his resignation.

But the travails of the Co-operative Bank may now be in danger of eclipsing the ethos of the Co-operative as a group endeavour. While banking standards remain under review in the UK, the mood has been turning on the glimmer of economic recovery. There is little indication that leadership at UK banks is going to give in easily on attempts to rein in executive pay and realign reward in the industry, and the Co-op is unlikely to lead reform there. This may well increase the ‘disconnect’ between the Bank and the values of the Co-operative Group as a whole.

Abandoning the banking side would not be a quick fix either, for many reasons. Today the Co-operative Group suspended a board member whose accountancy qualifications turned out to be erroneous, reinforcing the impression of sloppy corporate governance throughout in terms of the accountability of decision making, as well as a seriously flawed appointments process.

But what the Co-operative Group does next will be worth watching. It says it accounts for some 80% of the total co-operative movement in the UK. Although there is no direct link between its members and the Quakers, there is an echo when it comes to an ethical approach to business, formed of collaborative intelligence. It has been said that it was that ethical approach which gave Quaker retailers competitive advantage over rivals because their customers “knew they were not being ripped off and didn’t have to haggle to get a fair price.”

The Quakers are linked with UK banks, such as Barclays plc and Lloyds Bank (now Lloyds TSB), with Friends Provident, (Friends Life) the life insurance company, and other businesses. In the US, law firm Duane Morris and Cornell University are among those with noted Quaker links. Both campaigners Greenpeace and Amnesty International, have Quaker origins.

It is surely no coincidence that the ethical approach identified with the Quakers- and inextricably woven into the co-operative movement- has had good success in the performance of businesses, and is being looked at anew today as business seeks to reconnect with the society it serves.

There is evidence that there must be something to it  in the US, where the Quaker Oats company founded in the late 19th century still uses the image of a traditionally dressed Quaker on its cereal boxes – although its website makes it clear it’s a spurious connection. “Both former owners, Henry Seymour and William Heston, claimed to have selected the Quaker name as a symbol of good quality and honest value” it says.

It is all about the creation and preservation of reputation over time.

The co-operative movement in the UK, like the Quakers, is born of a desire for consensus and collaboration in the search for a better future. As such, it is not surprising that Lord Myners’ initial proposed governance reforms were rejected, as they were possibly just too far apart for consensus. It is said that the Quakers did not decide by vote- they kept on discussing the issue until there was a unanimous conclusion.

While it may be too much to hope for unanimous conclusions, boardrooms are designed to work best on consensus.

These days they also operate in a media spotlight, and those who are bankers and other ‘high-flyers’ are more comfortable often in its glare than those who just want to ‘get on with the job.’ It is just another factor to bear in mind in the continuing tale behind the scenes at the Co-operative Group, where ‘ordinary folk’ meet ‘so-called City grandees.’

 
Update
2

2 weeks ago

Khazanah throws MAS RM6b lifeline

Aug 29 2014 5:01pm CDT | Source: Business Times Singapore

August 30, 2014 1:15 AMKHAZANAH Nasional will inject RM6 billion (SS$2.4 billion) over three years to resuscitate loss-making Malaysia Airlines (MAS) under a recovery plan that includes even an Act of Parliament. Other key moves are migrating its operations, assets and liabilities to a new company (NewCo) and slashing the workforc ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 
Update
1

2 weeks ago

MAS posts loss of RM307m for Q2

Aug 28 2014 5:00pm CDT | Source: Business Times Singapore

August 29, 2014 1:13 AMMALAYSIA Airlines (MAS) registered a loss of RM307 million (S$122 million) for the second quarter to end-June, but warned of worse to come in the second half when the "full financial impact of the double tragedies of M ...
Source: Business Times Singapore   Full article at: Business Times Singapore
 

 

Don't miss ...

 

<a href="/latest_stories/all/all/30" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

blog comments powered by Disqus

Latest stories

Why marijuana users end up feeling worse
New York, Sep 15 (IANS) Adolescents and young adults who smoke marijuana frequently may attempt to manage negative moods by using the drug but end up feeling worse, says a new study.
 
 
Schizophrenia a group of eight distinct disorders: Study
Washington, Sep 15 (IANS) The debilitating psychiatric illness schizophrenia is not a single disease but a group of eight genetically distinct disorders - each with its own set of symptoms, new research indicates.
 
 
'Old climate change formula no longer exists'
Washington, Sep 15 (IANS) The traditional formula on climate change that says that regions that have a moist climate will experience additional rainfall is no longer valid, scientists say.
 
 
OPEC daily basket price closes higher
Vienna, Sep 15 (IANS/WAM) The basket of 12 crude oils of the Organisation of Petroleum Exporting Countries (OPEC) closed at $95.68 a barrel Friday, compared to $95.35 a barrel last Thursday, the OPEC Secretariat said.
 
 
 

Latest from the Network

New Zealand PM declassifies spy documents
Wellington, Sep 15 (IANS) New Zealand Prime Minister John Key Monday released previously classified documents regarding the country's security agencies as his government became the latest target of claims by US spy...
Read more on Politics Balla
 
Libyan PM rejects talks with armed Islamist group
Tripoli, Sep 15 (IANS) Libyan Prime Minister Abdullah al-Thinni has ruled out any negotiations with the Libya Dawn Islamist armed alliance, saying the government will launch new assaults to wipe it out. Sky News...
Read more on Politics Balla
 
Toll in Philippines ferry capsize rises to six
Manila, Sep 15 (IANS) The toll from the sinking of a ship off Panaoan island in the central Philippine province of Southern Leyte has climbed to six, the Philippine Navy said Monday. Marineth Domingo, spokesman of the...
Read more on Politics Balla
 
Why marijuana users end up feeling worse
New York, Sep 15 (IANS) Adolescents and young adults who smoke marijuana frequently may attempt to manage negative moods by using the drug but end up feeling worse, says a new study. "Marijuana use is a vicious circle...
Read more on Celebrity Balla
 
App to track what makes you truly happy
Washington, Sep 15 (IANS) Do you think the smartphone is a source of undue stress? Try this app created by three students at the University of California-Berkeley that claims to make them a source of goodness. The "...
Read more on Celebrity Balla
 
Schizophrenia a group of eight distinct disorders: Study
Washington, Sep 15 (IANS) The debilitating psychiatric illness schizophrenia is not a single disease but a group of eight genetically distinct disorders - each with its own set of symptoms, new research indicates. In...
Read more on Apple Balla
 
Hillary Clinton visits Iowa, a key election state
Washington, Sep 15 (IANS/EFE) Former US secretary of state Hillary Clinton has taken part in a fundraising event in Iowa, a key state in the upcoming presidential campaign, triggering fresh speculation about her...
Read more on Politics Balla
 
Egypt court releases prominent activist on bail
Cairo, Sep 15 (IANS) An Egyptian court Monday ordered the release on bail of leading activist Alaa Abdel Fattah, who is held on charges of protesting without police permit, and referred the case to another court, media...
Read more on Politics Balla
 
'Old climate change formula no longer exists'
Washington, Sep 15 (IANS) The traditional formula on climate change that says that regions that have a moist climate will experience additional rainfall is no longer valid, scientists say. The old formula that dry...
Read more on Apple Balla
 
One Direction's new single due late September
London, Sep 15 (IANS) One Direction's next single titled "Steal my girl" from their upcoming album "FOUR" will release Sep 29. The band's Liam Payne shared the news on Twitter, reports billboard.com. A photo of the...
Read more on Celebrity Balla