The Co-op as Campaign – taking action on modern slavery

Unadulterated food was the first campaign of the co-operative movement, a natural offshoot of efforts by members to meet their own needs in the nineteenth century. In the late twentieth century, the Co-op campaigned with its members on issues of international debt and climate change – an unadulterated planet.

In a sign of its return to health, the Co-op has returned to campaigning. With 4.6m members, a decision was taken in May 2017 to campaign on the issue of Modern Slavery. Since then, building on the core focus of reducing the risk of slavery in its supply chains, the campaign has had three aims:

  • awareness of slavery – research the Co-op ran in 2017 suggested 4 out or 10 people in the UK do not know what modern slavery is;
  • extension of Project Bright Future which is the Co-op’s unique scheme to provide a pathway back to paid employment for victims of Modern Slavery; and
  • greater support from all of civic society for victims of modern slavery to assist their recovery.

Bright Future had an initial launch in March 2017, with independent evaluation by University of Liverpool in November 2017 and Parliamentary Roundtable coverage in January 2018.

The Co-op is now recognised as the leading business voice in the UK on the issue – a member of the Home Secretary’s Business Against Slavery Forum, on the Expert Panel for the Evening Standard’s Slavery campaign chaired by Cardinal Nichols of Westminster, with a report due to be published imminently and often held up by the Home Secretary and the UK’s Independent Anti-Slavery Commissioner as the model for businesses to follow.  In November the Co-op became only the sixth company – and the first UK company – to be recognised for leadership on the issue with the Thomson Reuter’s Stop Slavery Award for work on victim support.

The Co-op has worked openly and collaboratively with other co-operative societies, with a number engaged in Bright Future. Alongside this, Co-operatives UK has shared resources with our members – https://www.uk.coop/resources/modern-slavery

The call is now out for members to sign up. There is now a very clear, simple and effective way for anyone to support the campaign – by writing to their MP to ask them to support Lord McColl’s Private Members Bill which is easily done by clicking on the #FreeforGood campaign.  All you need to do is click, enter your postcode, your email address and – ideally – add in a line to the letter saying you are a co-operator and… press send.

Co-operative values are about working together. When you co-operate, you raise the limit of what could otherwise be done. In this case, a return to business health and a return to campaigning means that the Co-op is helping to transform the lives of some of the most vulnerable and exploited people in our country and the world.

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Davos – the world’s problem-solving summit… for those who cause so many of the world’s problems

The agenda is a tribute to its organisers, identifying so many challenges that an unequal and unsustainable world faces. But who is the agenda for? This is the trouble with Davos. It is the world’s problem-solving summit for those who cause so many of the world’s problems in the first place.

Oxfam has just published an update on its work on global inequalities. 82% of wealth created worldwide went to the top 1%. The poorest half saw no increase at all. Oxfam together with a wider alliance called Fight Inequality is calling, among other things, for wider ownership. Quite right and co-operatives are one proven way to disperse ownership more broadly

So, as the world’s business elite starts the World Economic Forum in the snow and slopes of Davos in Switzerland, we are publishing a report on the co-operative alternative – showing how the world’s largest co-ops share ownership, control and profits with tens of millions of people.

The report by Professor Johnston Birchall is on the governance of large co-operative businesses across the world. It is a comprehensively revised and updated second edition of a classic work, examining how the world’s largest co-ops ensure that their customers, employees and suppliers have meaningful influence over what the businesses do.

The findings are encouraging. Good governance can’t be taken for granted, but done well, it allows for that magical mix that the Davos participants are talking about – inclusive innovation and a formula of economic success that empowers the many and not the few.

Anyone up for worker co-operatives out of the private sector ashes?

So, Carillion.

Once proud in construction, you are now the largest UK corporate failure in today’s public service outsourcing market. And there are others knocking on that door, not least Four Seasons, desperate to restructure and which looks after 17,000 vulnerable and elderly adults.

Is anyone up for a mutual solution?

We know from our research that often businesses fail from the top, but the expertise and the knowledge to make a success is in fact in the workforce. In a number of countries, such as Spain, this has prompted a careful and well thought through programme to save jobs through worker ownership.

With Carillion, the work is so much project-based that there would be a natural team for many service contracts that could form the basis of an employee-owned worker co-operative. This could offer public sector contractors an alternative to bringing services in-house, though of course that’s possible, or to retendering anew, or worse a shotgun contract let on poor terms to Carillion’s competitors.

Of course, there are also subcontractor affected, with the option that they could form a co-operative consortium to take on the contract with former Carillion staff at the core. In ways, Carillion – with its array of contracts, sub-contracts and debt now evaporated – was a somewhat dysfunctional conduit for small businesses to participate in public sector contracts. Co-operative consortia, without the dividends, exec pay, low-balling or black listing, and with values closer to those of public services, could be a more functional replacement.

The UK insolvency procedure doesn’t encourage these kinds of approach. Workers are assumed to be creditors, waiting for and their position in the pecking order, unless the business itself can be taken forward and staff kept on. But there is sense in it. Insolvency law is not in itself a bar, although of course this adds a degree of complexity.

What is needed is a regulatory pathway, where Central Government, which after all has done work for many years on public service mutuals, creates a route that the administrator, public sector commissioners and Carillion’s local project staff can use to work together to explore delivery of the same contract, or adapted where needed, through the formation of worker co-ops.

Jumping from projects in a giant corporate to a values-based worker co-operative is not just a technical and legal transition but a cultural shift, so it is one that the wider co-operative and employee owned world needs to come together to support, bringing to life the extraordinary potential of worker ownership. We’d have to step up as an proactive partner.

I’d welcome your comments and suggestions on this.

Perhaps something good could yet come of this extraordinary market failure.

Proposed new governance rules will require every business to test its values

The Financial Reporting Council (FRC), UK based, is perhaps the most influential source of governance advice around the world, as originator in 1992 of the widely copied Corporate Code. Now, the FRC has torn up its previous code, with a radically rewritten version for consultation that stresses long-term success and proposes a new requirement for businesses to test its values across the business, from top to bottom.

The proposed text, issued last month, says that “Directors should embody and promote the desired culture of the company. The board should monitor and assess the culture to satisfy itself that behaviour throughout the business is aligned with the company’s values. Where it finds misalignment it should take corrective action. The annual report should explain the board’s activities and any action taken.

[For full disclosure, I have been a member of the FRC Stakeholder Advisory Council, representing the co-operative sector and a keen advocate for this change]

Sir Win Bischoff is Chairman of the FRC, and explains that “a Principle promoting the importance of the intrinsic value of corporate culture is a new addition to the Code. Building trust in business has to start in the organisation and forming a healthy corporate culture is integral to the credibility of a company.

For co-operatives, a requirement like this has been in place since 1995, which established a global set of values and principles, now widely used in laws and regulation around the world. Co-operatives UK will shortly be publishing a new international review by Professor Johnston Birchall of governance across large co-operatives, showing how the sector has given life to these core values and principles across widely varied cultures. Done well, values can create a powerful alignment across the business.

The FRC consultation runs up to the end of next month, and once the new code is issued, all companies with a premium listing on the London Stock Exchange are obliged to report against the code.

So, how can companies test their values?There are a range of options and if you want to guide to the field, including co-operatives as a case study, then an introductory toolkit for values in business is set out in my 2016 Routledge short book, Values: how to bring values to life in your business.

As a gift to shareholder companies coming to values for the first time in a serious way, here is a Checklist on Values in Business that I have used in the co-op sector.

Articulating values Does the organisation have an agreed statement of shared values? Are these values published and available? Are the values translated into expectations around everyday behaviour?

Leadership on values Is the strategy and direction of the organisation informed by its values? Do those with responsibility lead by example?

Governance on values Does the board consider values and track performance and risk in relation to them? Does the board consider external assurance and stakeholder feedback in relation to the values of the organisation? Are values integrated in the framework of policies approved by the board for the business?

The values fit Are the values in line with the core purpose or founding story of the organisation? Are the values the right ones, in terms of their fit with the wider market and society within which the organisation operates?

Ownership and awareness of values Do those involved in the business know what the values are? Do those in the business believe that the values are ones that they care about? Do the values inform the conversations, communication and planning of those within the business?

Integration of values Are values integrated in human resource management – such as performance review, learning and development and colleague recruitment and induction? Are values integrated into commercial relationships – such as buying decisions, supply chain management, and partnerships? Are values integrated into marketing – such as communication, product and service design and innovation?

Accountability on values Do values form part of the accountability framework of the business to its ultimate owners, for example in dialogue or in the articles of association? Do values form any part of what the business reports on or discloses externally? Are the interests and perspectives of stakeholders considered in the way that values are handled?