The Co-op Group, Britain's largest mutually-owned organisation, has put forward detailed proposals for governance reforms that it has said are necessary to secure its future.
The supermarkets-to-funerals group agreed in principle to change the way it was managed in May after a series of near-catastrophic mistakes culminated in a £2.5 billion loss last year.
In a further response to proposals initially set out by Paul Myners, a former government minister and veteran of Britain's financial industry, the Co-op today set out a new board structure.
This is intended to inject a more professional management at senior levels.
Co-op Group chairwoman Ursula Lidbetter said the pillars of Myners' reforms had been retained, but the new board would still include three directors nominated by members.
"We will be creating a smaller, more effective board with a majority of independent directors," she said. "There will be testing eligibility criteria for all directors including business acumen and a commitment to co-operative values and principles," she added.
Myners had been appointed to overhaul the group's structure after a series of bad decisions bought the 150-year old group to its knees.
He proposed replacing a board drawn from local co-operatives and containing no executive members, with a smaller group with commercial experience equal to its rivals.
The group's present board, which includes a retired telecoms engineer, a publisher and a plasterer, had overseen what Lidbetter described in May as "years of bad business decisions that crystallised into one very ugly number at the bottom of our accounts: a £2.5 billion loss".
Mistakes included the ill-fated 2009 takeover of Britannia building society, a deal which eventually resulted in it losing control of its banking arm after plunging to heavy losses.
Co-op bank had also faced embarrassment when its former chairman Paul Flowers was arrested for possessing illegal drugs, for which he later pleaded guilty.
Myners, who had been appointed last year as the Co-op's senior independent director and asked to review the way it was run, quit in April after meeting resistance to his proposals. He subsequently launched a blistering attack in which he said the board as it stood was not competent to perform the duties expected of it.
Myners said today the latest proposals did not go as far as he recommended but represented significant progress.
"The acid test will be whether they are able to attract outstanding candidates to join the board without compromising on necessary standards," he said in a statement. "There needs to be rigorous application of a high test for membership of the board given the demanding business challenges facing the group," he added.
He said the commitment to setting the bar at the right level would be greater if those "lay" directors who were on the board over the last five disastrous years made clear they would not stand again.
Lidbetter, who will stand down after her replacement is appointed, said the group would take professional advice to set he new standards.
The proposals also include creating a council of up to 100 people drawn from the group's 8 million members to uphold its co-operative principles, and changing to a "one member one vote"structure.
The reforms will be put to a vote at a meeting on August 30.