In this new ongoing series, Edge Hill Business School staff offer their views on current organisational, economic and policy issues.
All Change at the Co-op (But not yet !) : What have we learnt ?
First of all I need to declare an interest – I am a member of the Co-Op Bank (since the late 1970s) and a member of the Co-Operative Society too. The comings and goings at the Group raise a whole series of issues and they provide an insight into some much broader questions of corporate governance. The most recent internal dispute over pay for senior managers is being presented by some as an internal clash within the Board over the future direction of the whole Co-Op Group.
I see it as much more basic clash. It is less (I think) about values and much more about the governance arrangements within the Group and where accountability for decision making sits. I can see that it may appear to be about values and ethics (and it is all of these as well) but the most significant clash appears to be about who makes decisions and how and in what ways are they held accountable. We can expect further changes to come with more resignations I expect as the restructuring continues. At the same time there are broader questions too of how such a complex set of different and separate organisations and businesses act as a ‘corporate’ whole. This raises the competency question – who appointed who and why – as well as the accountability question – who is accountable and where.
It may be that the clashes within the Group are an indication of a much deeper and more fundamental problem of the viability of the Co-Op as a group in its own right. We might see a bigger restructuring take place as the Group looks to develop a survival plan. So what are the lessons – I think there are three – firstly, what are the governance arrangements (who decides and where does accountability sit); secondly, complexity of organisational structures do matter – they do affect the governance arrangements so scaling back on complexity might be necessary to ensure enhanced scrutiny and governance; finally , being clear about who your reference group is becomes really important in a crisis – despite the attractions of having a ‘membership’ base the Co-Op Group finds that the key reference point is the City.