Rumour has it that formal announcements to the markets and bondholders about the future of the bank will be made on Monday 4th November.
In the meantime Ethical Consumer has launched a campaign on the basis of “staying ethical: returning to mutual” http://saveourbank.coop/ . This seems both practical and principled. It saves the potential account moving campaign until we have more information and maintains the aspiration to return the Bank to mutual status.
On the question of the use of the name “Co-operative” addressed here last week, Ed Mayo’s comment to my blog post reserves Co-operatives UK’s position until full details of the new arrangements are known, including the amendments to the Bank’s articles of association and a separate board concerned with ethical issues. Ed says there:
“Given you mention us, I thought I would explain our role. Co-operatives UK is the guardian of co-operative identity in the UK, in line with the International Co-operative Alliance (ICA) Statement of Co-operative Identity, .and recognised as the national apex body by the ICA.
“We have made a commitment to examine the co-operative identity of the Co-operative Bank, once the formal proposals are made, which are due shortly. This is a significant matter and it [is] because of its importance, that we have said that we will not add to speculation by commenting on the media comments in advance, but assess this in a formal way when we have the formal details of structure and constitution. We do the same for any business that wants to call itself a co-operative. We are on record, though, with our approach to the matter, which is set out in our policy, the substance of which was subject to consultation with our members. This can be found on http://www.uk.coop/identity“
In the Co-op News, Ed is quoted as saying:
“’Whether this is the case must depend on a reading of the full prospectus and formal constitution of the new Bank – and whether these are accepted by all the relevant parties. We have already indicated that if we believe that it is not a co-operative, then we would argue vigorously for a review of the name.’
He added: ‘There are some indications that co-operative values may be locked into the core purpose of the Bank. If so, then the Co-operative Group deserves credit for a creative model that will be new to the UK. This is what in other countries is called a Public Benefit Corporation – profit-seeking, but with a wider public purpose enshrined in its goals.'”
It will be interesting to see what emerges next week. Could there be a transition period away from the name?
Under the Listing Rules, Prospectus Regulation, Financial Services and Markets Act 2000 and similar laws, what is said next week locks people in. So it is important that the name issue is dealt with in the announcements. What is said there will also no doubt be crafted to avoid continuing uncertainty on the name issue which would affect future share price movements. The best (maybe only?) way to do that is to commit to phasing out the use of “co-operative” and similar words after a transition period. That will give time to come up with a new name to reflect the ethical intent and the actual structure and safeguards in place in the new arrangements so as to avoid haemorrhaging customers as a result of the change but also avoiding misusing the “co-operative” name.
The International Co-operative Movement and UK co-operators will be fully entitled to feel betrayed by a failure to address the issue or by the continued use of the name under 70% investor ownership other than as a limited transitional measure.
I’ll try to do an analysis of the full documentation here within a few days of its release.