The Myners Review of the Co-op gave an update in March – with dire warnings for the future of the Co-op movement. Headed by Co-op director and former Labour Minister Lord Myners, the review is looking into the governance of the Co-op Bank retail group and associated companies, the resignation of the Chief Executive and the desertion of senior management figures.
The Co-op is a major employer, with 90,000+ staff throughout its differing retail businesses. But it has had the guts ripped out of it by its attempt to be a normal City asset stripper by merging with the Britannia Building Society, ignoring the Britannia’s toxic mortgage lending and the attempt, encouraged by the government and opposition, to devour Lloyds 643 branches.
The £1.5 billion black hole identified in the Co-op’s 2012-13 finances looks to be overshadowed with a further estimated £2 billion loss this year. The resignation of the chief executive after ten months followed on the exposure of his £6.6 million remuneration package. His predecessor received £1.3 million.
The Myners report is about scrapping the Co-op’s historic, archaic, 19th-century governance and operational style. The proposed replacement is neither democratic, nor modernised, nor in the interests of the Co-op staff and its customers. It is about turning the Co-op into yet another PLC to be bought, sold, and disposed of as with any other capitalist venture.
And if the governance of the Co-op has been so archaic, if its outgoing boss’s life was so degenerate, its managers’ judgement and leadership so bad, then wait and see what follows.
The breakup of the Co-op business family will see the hiving off of separate business entities, job losses and asset wastage. That will benefit only the hedge fund interests, the private equity privateers and the Co-op’s direct monopoly rivals on the high street, be they retail (Asda, Tesco, Sainsbury etc) – or the big four banks, HSBC, Lloyds, Barclays and RBS. ■