THE chief executive of CI Coop has reacted to a “disappointing” outcome from this week’s special general meeting at which members failed to back a series of proposed rule changes.
The Coop’s board was seeking members’ support for new arrangements for the appointment and length of service of directors, but although three of its four motions were supported by more than 60% of those voting, none reached the required two-thirds majority.
The result came as a blow to the organisation, which recently suffered a backlash from members after confirming that difficult trading conditions had placed a question mark over the traditional annual dividend paid to shareholders.
Ahead of the organisation’s annual meeting in May, the Coop’s directors are set to outline proposals about potential changes to the dividend stemming from “continuous pressure” on global supply chains and prices since Brexit and the Covid pandemic.
Having attended both parts of the meeting, which was joined by around 70 members in Jersey on Wednesday and a similar number in Guernsey the previous evening, chief executive Mark Cox said the board was still committed to seeking members’ support for change.
He said: “The board felt the proposals were in the best interests of the Coop and would enable us to comply with the corporate governance code [which is used by Coop organisations in the UK].
“It was good that members engaged with these proposals, and exercised their democratic right; we will pause now and reflect on what happened.
“It’s disappointing not to have reached the required majority – we had set a high bar, but take confidence that the majority of members voted in favour [on three motions].”
Although separate breakdowns of voting were not made available, Mr Cox said the proportion of votes in favour had been higher in Jersey than Guernsey.
John Henwood, one of the members who attended the Jersey meeting, criticised the board for its approach to changing the rules.
He said: “I can understand why the board would want to modernise, but it does appear they were rather picking and choosing which aspect of the governance code they wanted, rather than adopting it in its entirety.”
The annual meeting in May will see members vote on proposals which could see the end or reduction of dividends paid out to members.
The level of dividend has historically been determined by the financial performance of the business in the previous year, allowing customers providing share numbers at the checkout with the chance to earn a financial reward every time they make a qualifying purchase.
Details of the proposed changes are expected to be confirmed when the agenda for the annual meeting is published in April.
