Co-operatives UK has reviewed and revised its Code of Governance and will launch the new Code at the Practitioners Forum on 7 November in Manchester.
The UK Co-operative Movement has a long history of recognising the importance and value of good governance practice and we have had codes for our retail consumer, agriculture and worker co-op members for many years. These self-regulatory codes provided an opportunity for co-ops to check their compliance with agreed good governance practice and decide if they need to change what they do or explain to its members why they do something different.
In recognition of...
- changes in corporate governance nationally and internationally
- the fact that co-operative governance practice is always evolving
- the length of time since the last review
- the fact that our existing codes meant that many co-ops did not have a code applicable to them
...we felt it was time for a period of review and reflection. In consultation with members and the Co-operative Governance Expert Reference Panel we have developed a new Code that can be used by all co-operatives, irrespective of type or size.
Read and download the Co-operative Corporate Code of Governance.
As with previous iterations, the revised Code draws on best practice from a wider business setting, including the UK Corporate Governance Code and the Wates corporate governance principles for large private companies, but reflects the distinctive characteristics and differences of co-ops particularly the importance of accountability to members and member ownership and control.
We have streamlined the Code to make it shorter, and easier to navigate and check compliance. We have retained the use of a series of Principles that we believe all co-ops can abide by, but have reduced the number of them and the provisions that we would expect co-ops to map their compliance with. The Code continues to operate on a comply or explain basis.
The Code recognises some changes in corporate and co-operative governance best practice and provides for:
- recognition of the importance of organisational culture and its impact on the success of businesses, and the role of the board in setting and embodying culture
- ensuring that election processes are based on merit and objective criteria
- two tier structures, for example member councils and supervisory committees
- different methods of electing and appointing board members and the relationships they have with the co-operative, for example, independent non-executive directors, independent chairs
- the importance of the role of the board in determining, managing and evaluating risk
- clearer principles related to remuneration, the use of member capital and the payment of dividends.
The Code remains a self-regulatory tool and we recognise that its application will be different depending on the type and size of a co-op, flexibility is key and co-ops should feel that they can apply the Code in the way that works best for them and provides the most value to their members.
A suite of resources will be produced designed to assist co-ops to use the Code in the right way for them. Resources will include template terms of reference, role descriptions, specimen induction programmes and more. In time we also hope to develop guidance to assist co-ops to communicate their governance practice and compliance with the Code Principles to members, and to enable the members to hold the board to account.
Co-operatives UK can assist co-ops to check their compliance with the Code, audit their governance practices and introduce governance change. Please contact us for further details.
The revised Code will be available for use from the 7 November. If you have any questions about the revised Code or to view a copy of the code, please contact us.