Restructures can often be painful. However, The Co-op restructure has developed into a full-blown crisis. In October, as we reported, early implementation was “chaotic”, as new contracts underwent multiple alterations, senior leaders responsible for executing the plans exited suddenly, and questions from colleagues and suppliers over the restructure went unanswered.
But hopes the situation would calm down, as issues with the plan were ironed out, do not seem to have materialised. On the contrary, deeply troubling new allegations have made national news this week, after a letter addressed to the Co-op board was leaked to the BBC. Claiming to represent “a significant proportion of senior leaders from WL2 and 3”, the letter – seen by The Grocer – alleges the leadership culture of the operating board is “toxic” and “largely cosmetic”; that a sense of “alienation and fear” means managers “are unable to perform their roles effectively”; that communication is “alarming”, “accusative” and “degrading”; and that “emotion-led decision making… has been poor [and] against advice”, leading to the “near destruction of morale, trust and transparency”. There are a number of further potentially damaging (and potentially defamatory) allegations.
But perhaps the most damaging allegation is the reference to corporate governance. The letter states that the “deliberate sidelining of the [Co-op] board” in “the decision to create the sizeable and complex new [group commercial logistics] division, while still recovering from [the] cyber [attack]” – “represents a worrying breakdown in governance and oversight”.
In fact, the question marks over governance go further. With these and other serious allegations levelled against the operating board, what investigations have been carried out by Co-op board chair Debbie White and her independent, non-exec directors? It’s not clear. In a statement released after the letter was leaked to the BBC, the Co-op strenuously denied claims of a toxic culture. But surely the Co-op board should issue a clear message promising to investigate the allegations urgently and independently. That’s what good governance looks like. And when the Co-op nearly went under in 2014 owing to a major governance failure, new best-in-class governance was introduced, combining PLC best practice with additional oversight from the Member Council (of which most employees are members). Why do they not appear to be using it?
With the strapline ‘Owned by you, Right by you’, the Co-op’s advertising glibly promises that ‘if you were inventing a place to work, this is what you’d create’. It doesn’t sound like that from the outside now.







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