The Co-operative Group is offering an eleventh-hour compromise over the overhaul of its board in an attempt to avoid an injunction from one of its largest owner-members.
The Midcounties, the largest of the independent societies which together own more than 22% of the Co-op Group, has been considering whether to take legal action before Saturday’s Co-op annual general meeting to block the appointment of three member-nominated directors to the board. The rest of the supermarkets and funeral homes business is owned by about 7 million members who shop in Co-op stores and use its other businesses.
A row with longstanding members of the Co-op erupted last month when the group announced that a shortlist of six candidates had been reduced to three. This avoided the contested elections that had been anticipated by experts on the co-operative movement.
The Midcounties took legal advice over the process and concluded that the results of the board elections would be void if the they took place, and said it would consider taking out an injunction. The Co-op Group is now thought to be offering arbitration to avoid such an eventuality.
The Midcounties said discussions with the Co-op Group “have been both courteous and productive and a proposal is to be considered by the group board on Friday, which, if agreed, will enable Midcounties to withdraw its threat of taking legal action”.
Ruth FitzJohn, president of Midcounties, said: “It was almost inevitable that the early stages of the new democratic process would give rise to issues to be resolved. By adopting a co-operative approach where both parties have the best long term interests of the movement at heart, we are confident we will emerge from this phase a stronger movement and fit to face the future challenges with confidence.”
Allan Leighton, chairman of the Co-op, and Lesley Reznicek, president of the members council, have told key representatives of the owners of the organisation that the elections for next year’s member-nominated directors will be changed. They have also told members they aim to hold contested elections for the three seats next year.
The results of the election, which closed on Wednesday, are due to be announced at the AGM. It will be the first such meeting held under a new one-member one-vote system, which replaced the previous arrangement where members were represented through regional councils. Approximately 2.5 million members are eligible to vote.
Co-op declined to comment.
