Myners misses a trick

Education is the only long-term route to health for the Co-operative Group

The Myners report into the Co-operative Group has made front-page news. Its adoption represents a fundamental change to the way the organization is run. The report says a lot about governance, but largely dismisses the role of education. Myners’ proposals are reasonable, but he has missed a trick in not making education more central to his analysis and proposals. Education is the best (and possibly the only) long-term route to success in a large and complex co-operative business.

Myners’ message: managing complexity demands outside experience

Myners’ report offers a vision of re-invigorated governance where outside experience is crucial for Governing Board membership. Myners also proposes a revised national membership structure. Myners is long on the details of what went wrong, and looks at governance issues in admirable depth, but ultimately provides a sticking-plaster solution that aims at improving business performance while containing democratic interference.

The problem with his vision goes to the heart of co-operative values: his solution is one to make the business work more strategically and efficiently (great!), but he tacitly positions democracy as a burden on the organization. Myners describes observing discussions at Group Board level where reference to co-operative values was used as a way of obfuscating, and ultimately confusing issues. This is a shame: values ought to enlighten and improve the business, not be used as blockers. This type of behaviour is all topsy-turvy.  But so is governance reform without a systematic review of education for governance.

Myners’ attempt to fix the groups woes might be successful in business terms, and might work reasonably quickly. This would rather miss the point of the concerns raised within the movement. Myners’ proposals do make the Co-op Group more like a conventional business. They also multiply the external and capitalist influences on its running. By minimising rather than directly addressing this issue, Myners does not provide a longer-term answer for how the Co-op Group can source individuals with both the business experience and co-operative values it seeks.

For the average member, as much as for the Group Board, a solution to the current financial situation by raising member capital such as proposed by David Thompson seems distant because we have little evidence (to my knowledge) that most members see themselves as anything more than loyalty-card holders. The Co-op Group has failed to articulate its relevance and purpose to many of its own members, and clearly does not see this sort of solution as feasible. A co-operative that does not rely on its members to solve its problems is by definition not acting in their mutual interests. This is not only a business in trouble: we are witnessing a failure of education that has led to a failure of governance.

Brutal reading

Myners largely dismisses existing educational programmes for preparing members for Group Board roles, saying they are not up to the task. He is probably right – for a role of this nature, experience counts, and the training, while good, is not likely equivalent to the kinds of instructional programmes the co-operative movement offered in its heyday in the mid-20th Century, nor is it adequate to the demands of these roles. To quote at some length from p.57 of Myners’ report:

‘training alone will not equip an otherwise inexperienced person with the skills required to serve effectively on the board of the Group’

‘key competencies required for the Group Board to discharge its responsibilities … can be acquired only through direct, senior-level experience in comparably large and complex organisations’

 ‘It is extremely unfortunate that TCG members, particularly those who have devoted time and effort to fulfilling the various eligibility requirements for the Group Board, have been misled to believe that a series of very basic educational programmes would make them fit for Group Board roles. Even the world-renowned Harvard Business School would not make such a claim to its highly-capable MBA students’

‘In engaging with elected members over the past several months, the Review team has had to make clear to a number of individuals that the specified skills and any associated training that they had been told would qualify them for the Group Board were in fact far from sufficient. It is notable that other businesses have typically not sought to appoint current or former elected members of the Group Board to their own commercial boards, a fact indicative of the wider lack of experience and competence on the Group Board.’

Myners drives his point home clearly, and this will have been uncomfortable for some. I think, though, that it is a shame that Myners has missed the opportunity to explore in more depth the kind of educational deficiencies – and solutions – that will have to be brought to bear if the group is to thrive, and remain co-operative, in the longer term.

Myners’ limited engagement with education

Myners’ proposals limit the investment in education to a training budget for the new National Membership Council and a proper induction for the Group Board. The word ‘education’ is mentioned five times throughout the report, and although the proposal he makes around a protected education budget for the new National Membership Council is welcome, this appears to be an accommodation for the benefit of the representatives, rather than an investment in the future of the organization. While Myners also offers a few examples of education processes that have worked well, tucked away on page 109 in Appendix 2, overall he makes little of it.

I think Myners has missed a trick here. By situating the problem as one of governance, rather than an underlying educational deficiency, Myners does not admit the possibility of there being an appropriately co-operative response to these issues, and lacks the imagination to ‘fix’ the governance problem in any way other than simply changing the governance set-up to something more plc-like. By looking at the deficiencies in education in more detail, and making proposals to remedy them, Myners would offer a complementary and long-term solution that puts the power to improve the group’s fortunes back in the hands of co-operators.

This is not to say that the current Governance arrangements are optimal, nor that Myners’ proposals are unacceptable, but rather that Myners has only gone skin-deep, despite the thorough approach he has taken. What is needed is a cultural change that enables the group to operate in a businesslike fashion, and since ‘culture eats strategy for breakfast‘, the only way to go about making this change is the slow way – by persuading the organisation to change. This is a classic problem of education and development, which will not be fixed quickly with a governance change.

Any board members drawn from other businesses are likely to have had careers in capitalist enterprises, and to have trained through a capitalist lens. By fixing governance to allow capitalist corporate norms to dominate, without making a corresponding investment in the Co-operative Group’s educational capacity to develop the leadership it needs, Myners proposals may erode co-operative behaviour in the longer term.

Myners’ proposals do not place education at the heart of co-operation, as it should be. But this ought to come as no surprise – the elected representatives do not seem to have identified the educational deficit, and the Co-operative Group (some would say the whole movement) has come dangerously close to forgetting the importance of education, the Fifth Principle of co-operation. The Co-operative movement invests very little in research into itself, and so to a large extent Myners can be excused: there is very little co-operative scholarship for him to draw on. This state of affairs is a deep shame: if the pundits; if the elected representatives who oppose Myners; are unable to articulate the co-operative alternative, why should Myners be any more clear-sighted?

What Myners could have said about education

In diagnosing the deficiencies of the current educational programmes that supposedly provide preparation for Group Board membership, Myners could have gone further. He might have identified what would make an appropriate preparation, including the kinds of attributes necessary for an effective scrutiny role, and asked the question ‘How could the Co-operative Group adequately prepare members for Group Board membership?’ By drawing this out in some detail, he might make plain that a business education (including an MBA, other further study perhaps for a DBA, combined with exemplars of the kind of appropriate practical work experience, and so on) is necessary for these roles, and thereby indicate the sort of people that might be suited to them. Democracy need not mean amateurism, and it is entirely appropriate for a large organisation to make such proscriptions if it needs to. If the Co-operative Movement has a good idea of the kinds of attributes it requires at Group Board level, co-operators would be able to choose to prepare themselves for those duties, even if the road is a long one.

A gap analysis might reveal that not only is the current governance structure not delivering suitably-skilled individuals, but that the Co-operative Movement in its entirety, is failing to develop such individuals. Co-operation lacks the educational and development infrastructure to supply appropriately-skilled individuals. There is no Co-operative Business School or Law School, there is no Co-operative University. Co-operatives are insufficiently studied in UK Universities. Myners does not offer any thinking about the educational deficit in the movement, nor does he see it as part of a solution to the Group’s woes. Perhaps the road that needs to be travelled is just too long and costly to conceive of. Nevertheless, the long-term health of co-operation demands a massive improvement in educational resources and capabilities, and this must start immediately.

Lessons from history

Robert Owen founded an Institution for the Formation of Character at New Lanark. The Rochdale Pioneers famously dedicated the room above their first shop as a reading room. It is worth considering that the Pioneers managed to achieve a business success without all the advantages of other traders, but that early investment in education showed they were not complacent. The early history of the movement shows a constant investment in education, not only Schools and FE-level, but in some small ways in HE, too. This appetite for education was not sustained through the 20th Century. In fact it was effectively handed over to the state (blame Sidney and Beatrice Webb) and this seems to have resulted in the Co-operative movement losing sight of the importance of education as a key component of co-operative identity. There are no longer reading rooms in Co-op stores. The Co-op College has not been supported to expand to its true potential as a Co-operative University. The State, and our public universities are not as co-operative as they might have been. This state of affairs is not irreversible.

Eating the elephant

Co-operators want the co-operative alternative to be a genuine one, and Myners offers a bitter pill.

There is a co-operative alternative, but it is a long-term change, not a quick fix. The alternative is a significant and sustained engagement with higher education, to normalise the study of co-operatives and the practices of co-operation across tertiary education, much as is happening in primary and secondary phases through the co-operative schools movement. This requires a commitment to a new educational manifesto for co-operation, a national action plan along with a commitment to invest to meet that plan.

The co-operative difference could be identified, discussed, written about, and widely understood as part of educational programmes and research projects across the land.

Business schools could be researching and teaching co-operation, and if they find it to be effective, help make it a new orthodoxy that spreads the benefits of commerce and industry to all.

Law schools could help corporate lawyers become more open-minded about the range of corporate forms available to businesses.

Schools of Education could be training teachers to teach using co-operative pedagogies, and to form co-operative characteristics in their students.

Co-operative universities could be taking the best of our collaborative instincts, and using them to drive a mutual economy that secures the best for students, businesses and society.

There’s nothing inherently difficult or expensive about any of this: a national co-operative education board, a national plan, programmes of teaching/workplace learning and research works identified, and some funding to ensure that the Co-op Group is able to collaborate and draw out funding from elsewhere – public research funds and universities themselves.

Given the interest that private business is showing in the UK university sector, and the returns currently available, the Co-op Group might even consider investing in a university of its own.

But that’s another story…


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