THERE has been much debate among co-operators and others about the causes of the debacle that has overcome the Co-op Group, especially as we come to the special general meeting that looks at the new rulebook. 

The destruction of £2.5 billion of assets that it took members 150 years to acquire is a colossal failure of governance. The loss of the Pharmacy, the Bank and Co-op Farms really is heartbreaking.

Rescuing what remains is still tough — when a co-op business is owned by its bankers there is no member control. Many of those associated with the Co-op Group — I include myself in this group — are still in a state of shock about what has happened.

Failure in governance is not simply about the level of skills in the boardroom as Paul Myners would have us believe.

Historically academics attribute co-op failures to three key factors, “badly thought out business strategies, paying too much for acquisitions and boards being out of their depth.”

They rarely point to the “overweaning CEO” or non-co-operative managers. But that is what I think is the real problem here. 

Co-operative governance relies on mutual respect and understanding between professional managers and representatives of the members who share a common set of values.

Graham Melmoth, an earlier CEO of CWS, publicly stated that Peter Marks, the CEO at the centre of this disaster, “would not know a co-operative principle if it crept up and hit him in the face.” 

As a former president of the International Co-operative Alliance he knows what he is talking about. When he was CEO he instigated a co-operative values and principles programme — developed and run by the Co-operative College — for all senior managers. 

Sadly that programme was allowed to lapse when leadership in the CWS changed. 

Surely such training in co-operative identity should be mandatory for all in leadership positions — be they managers or elected representatives of the membership — after all they are the leaders of a co-operative business. 

This knowledge gap is I believe one of the factors in the governance failure.

I would argue that the governance failure at the Co-op Group is much more comprehensive and systemic than Myners’s trivial diagnosis. 

It includes the whole purpose of the business, the relationship with members and their representatives and the management. The co-operative education, such as it is, has failed to produce elected directors or managers with the qualities necessary to run a large scale co-operative business.

This argument has been best expressed by Peter Davis — see, Davis and Donaldson, Co-operative Management, A Philosophy for Business. 

When the Co-operative Bank was under the leadership of Terry Thomas his Inclusive Partnership plus Sustainability model of management was offering us a model of a co-operative-values-based managing style. 

His philosophy focused on membership as the key component. He recognised the social mission at the heart of what being a Co-operative really means and demonstrated how with good market research it could be reinterpreted for the modern age. 

In so doing the bank’s advertising and branding did not simply reflect what members wanted but also — this is the key point — broadened what they wanted by educating them.  

All the surveys that put the Co-op at the top for ethics are the legacy of this period. 

Not only did this recreate the co-operative brand it generated record surpluses to the CWS/Group keeping the whole retail movement afloat at a critical time.

Once he went, however, the rot set in. The ethos faded — we had lost the Co-operative Bank long before the hedge funds got their talons into it.

This is the real tragedy. The Co-operative Bank which was the only real post-war success of the movement has been wiped out by a mixture of charlatans and poorly educated idealists.

Is the situation recoverable? Mondragon, which until recently was roughly the same size as the Co-op Group, has its own university. Across Europe there are institutions delivering new co-operators as far apart as Italy and Finland.  

In Britain, however, the Co-op College is a shadow of what it once was. An institution that grew out of the first world war needs to be redesigned and rebuilt for the 21st century.  

Later this year the Co-operative College will see change. Its mission — to rebuild co-operative education. This will not be cheap but it is a vital investment — without the necessary skills, firmly rooted in co-operative values, we will be doomed to repeat this cycle of failure. 

We have to build a co-operative organisational culture ourselves as there is no-one else to do it. If we don’t we will simply keep reinfecting ourselves with the same alien and fundamentally non-co-operative culture.

The last generation of co-op managers to come from the old College at Stanford Hall included Ursula Lidbetter of Lincolnshire Co-operative Society and current Group chair. 

Maybe that is a small glimmer of light.