Voting time at the Co-operative Group

The Co-operative Group has now sent out AGM and ballot papers to those of its members who are eligible to vote.

The ballot paper includes the usual motion to approve the Directors’ Remuneration Report and also an additional motion to ‘approve a change in the Executive Remuneration Policy’.  However, the Group does not make it easy to know what precisely these mean.

To get the details you have to go online to read the Annual Report. It’s worth a look. For convenience I am giving the link here.

Executive pay can be, as the Remuneration Report itself says, an emotive topic and it would be utopian to imagine that the Group could necessarily practise the wage equality successfully operated at Suma Wholefoods. The Group says that it aims to set executive salaries and bonuses at the middle of the going market rate, although this is what a lot of companies say and it’s by no means always easy to know quite what this means in practice. The motion to make a change to the Executive Remuneration Policy actually refers to a proposal to increase the CEO’s bonus arrangements while keeping his base salary unchanged.

One thing did strike me from the report. The ratio between the highest and lowest paid employees of the Group is 1:48 on base pay alone, and 1:96 when bonuses are taken into account. The Group did some recent separate research on gender pay, which found that women’s pay is on average (mean average) 18.9% below that of men. This report is also not easy to find, so to help you here’s the relevant link.

Back to the AGM. There’s also a motion asking members to approve a rule change. Again, I feel the Group should have offered more readily accessible information before asking members to vote. Having looked at the details I can advise you that the main substantive change is to increase the maximum term non-executive directors can serve from six to nine years.  I’m personally not convinced by this proposal and in the absence of any clear reasoning I am not at all sure I will be voting in favour.

Remote democracy at the Phone Co-op’s AGM

The members of the Phone Co-op have overwhelmingly voted to transfer engagements to Midcounties Co-op – or, to put it bluntly, to be taken over. It’s a move (which admittedly now has to be formally ratified at a second SGM) I personally think is the right decision. The SGM in Sheffield was well organised and good humoured. The main vote was 202 in favour and 17 against.

I took part remotely, using live streaming and an online voting facility. Well done to the Phone Co-op for making this possible. There were, it is true, technical glitches but they were overcome.

This was an interesting experience for me, the first time I have participated remotely at a co-op general meeting. It is, I think, much better if at all possible to attend an event like this in person – there’s a commitment involved which isn’t necessarily there is you’re sitting at home online at risk of all sorts of other distractions (I had to momentarily dip out of proceedings when a friend came round wanting to use my printer for an emergency printing job for his youth group…) There’s a need for some etiquette for online participants too.  Some people (in usual social media style) were passing running comments (not always complimentary) as speakers were in mid-flow, and I’m not sure this is something which we should encourage.

But participating online did mean I could attend an AGM of a local coop I’m involved in at 11am this morning and still be enfranchised for the Phone Co-op meeting. So – good work.

What responsibilities do co-op members have?

I want to tackle today what I think is quite a difficult question.  It’s this:  what responsibility do ordinary members of a co-operative have, if their elected directors are not making a very good fist of things in terms of governance and member democracy?

A little while back (and for obvious reasons I’m going to be imprecise and will be fictionalising some things) I went to the AGM of a co-operatively run organisation I’ve been a member of for some time. It has around 6000 members and it operates in the area where I live: let’s imagine that it’s a locally-based consumer co-op.

The AGM pulled in perhaps twenty-five members, if you include the directors and one member of staff who was there. So at least we just met the quorum, which was sensibly set very low.  You can do the sums: about 0.05% of the members were there.

We were given refreshments beforehand, perhaps as a not-very-effective bribe to try to persuade more of us to attend, and then we began the formal business.

The accounts (handed out as the meeting started) did not look good and no dividend was possible, but there were perhaps one-off reasons for this. Every co-op can have off years. But more than this, there was a sense of an organisation struggling to get to grips with governance. The chair has been in post for almost as the organisation has existed and he dominated the meeting, including barging in in the middle of the treasurer’s report. He, and two other directors, were re-elected to the board in an uncontested election.

I asked some questions, trying to strike the difficult balance of being a responsible member asking necessary questions while at the same time showing that I supported the voluntary board and appreciated their efforts. A few other people asked some questions but mostly we listened.

So what responsibility do I have, and what responsibility do my fellow members have? I could of course put myself forward for the board, but I am already actively involved in several other co-op and community ventures and frankly this doesn’t seem like a priority for me. So if I rule myself out in this way from engaging directly, is it enough just to turn up once a year for the AGM?

Unfortunately I am prepared to predict that next year’s AGM will be almost a re-run of this year’s.

Taking stock at the Phone Co-op

Co-operative democracy, as I predicted, was much in evidence at the Phone Co-op’s AGM in Sheffield on Feb 3rd.  There’s a good report of the event on Toby Johnson’s blog the link to which has been up here on a comment but which I’m mentioning again in case you’ve missed it.

The Phone Co-op’s (rather beleaguered) Board has appointed Jane Watts as their chair, someone whose strong record in the co-operative movement should help steady the ship. The Board has also moved quickly to call a Special General Meeting on April 28th, a smart move since if the Board hadn’t done this themselves then dissident members would probably have called for one anyway.

It’s still not clear to me whether the Phone Co-op’s strategy for growth – which involves considerably more risk than its way of operating in the past – is rooted on a strong business case or on over-optimism from the Board.  But at least all members are being encouraged to scrutinise the proposals carefully. The Phone Co-op remains one of the modern jewels of the co-op movement in Britain and needs to be looked after carefully.

Questions to be asked at the Phone Co-op’s AGM

The Phone Co-op’s AGM in Sheffield on Saturday February 3rd looks set to be an important occasion for the exercise of co-operative democracy and member participation.

I blogged more than a month ago about the Phone Co-op, one of the jewels in the modern British co-operative story. Vivian Woodell, who was the co-op’s Chief Executive since the start of the venture, stepped down during 2017 in circumstances which are, it has to be said, opaque.

As I said in my blog, “For any business, the resignation of a key person is a moment of greater uncertainty and risk.  If the Phone Co-op were a plc and not a co-op, institutional investors would by now have been interrogating the Board in detail to find out exactly what the strategy for the future would be – to see if really the Board knew what it was doing.”

I’m not sure that I know what the Phone Co-op’s Board does plan for the future. There is upbeat rhetoric in the documents I’ve received of increasing profits to £2m in 2021-22, but there is also talk of losses in the interim. I’m not sure I’ve been persuaded that the £2m figure is anything other than wishful thinking.

It is now clear that other members of the society share my uncertainty. There is a long, and important, motion for the AGM proposed by Toby Johnson which interrogates in detail the information the Board has supplied and asks among other things for the Board to specify at the AGM “the upper and lower limits of the range of projected profits and losses for each year of the 4-year strategy, and the assumptions underpinning these projections.” I think members would be well advised to support Toby’s motion.

The Board (who are of course elected Phone Co-op members who receive only a very small allowance for their role as non-execs) may at this stage be feeling a little beleaguered.  They shouldn’t feel this. Member engagement (in the way that Toby Johnson’s motion is doing) is a positive advantage of the co-operative business model. It means that it is more likely, not less, that the co-op follows a strategy which will allow the business to prosper. Any Board of a co-operative that understands the way to tap into the experience and good sense of all its members is a Board that is demonstrating confidence, not weakness.

We’ll have to see what happens in Sheffield.  It’s very unfortunate that the date clashes with another commitment I can’t avoid, but I hope that he meeting is well-attended, that members ask probing questions, and that the Phone Co-op is as a consequence set on a firm footing for the future.

Member democracy and the Co-operative Group

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.

On apples and activism

Illness prevented me from attending Saturday’s Co-operative Group AGM in Manchester as I’d intended, unfortunately, so I can’t offer you any first-hand reportage of the occasion. But two observations.

Firstly, just the fact that for the first time the Co-operative Group had an AGM like this which was open to members is a real step forward. It was always nonsense that the Group’s AGM was previously only open to those enmeshed in the complicated internal regional and area governance structure. This is a valuable reform. This year’s AGM is something to build on.

And secondly, I’ve been mulling over a recent quote from the Group’s Chair Allan Leighton. Leighton, according to a Guardian article, claimed: “It’s the apples, not the activists, that will turn the Co-op around”.

I think Leighton has it half-right. I’d love to see better fruit and veg in my local Co-op store. I never did understand why, every Autumn at the heart of the harvest time, English apples were nowhere to be found in the shop (actually, to be fair, a few English apples crept in last year).

But I’d change Leighton’s quote in one fundamental way. The advantage the Co-op potentially has over its commercial rivals is exactly its membership base and its latent democracy.  I’d say that it’s the apples and the activists that will turn the Co-op around.

Idealistic? Inappropriate? Member engagement in the Co-op Group

I perhaps need to draw to your attention the extended debate that’s going on in the comments section of my post earlier this week (bottom up: ‘cluster’ idea) on the Co-op Group and grassroots member engagement.

My own response is that pretty well the only thing that the Group has to separate itself from other supermarket chains is its members, and that this could be turned into a competitive advantage. For this to happen members need a way to engage. For example, there are a lot of things I could contribute to make my own Co-op Group store rather a lot better, and probably rather a lot more profitable, but I have at present no vehicle for communicating my comments.

This debate is, quite rightly, about member democracy. But it’s also about making the Co-op Group a better business, too.

Voting time for the Midcounties Board

Democracy at Midcounties Co-operative is as keen as ever, I see.  18 candidates are standing this year for the six Board positions. I did my bit last night as a society member to cast my vote, hopefully choosing the candidates who’ll be the best ones for the cooperative’s continued success.

Good practice, of course, for the new member voting arrangements for the Co-operative Group.  Let’s hope democracy becomes as lively there.

Hey there, coop members

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…