Co-operatives, Mutuals and Friendly Societies Bill achieves Second Reading

We are delighted that Sir Mark Hendrick’s Co-operatives, Mutuals and Friendly Societies Bill received its Second Reading in the House of Commons on 28th October 2022.

With all-party and Government support, the Bill will now proceed to the Committee Stage in the Commons, where it will receive detailed scrutiny and be subject to technical amendment.  We anticipate that this will take place before Christmas.

You can download a video of Sir Mark’s speech through WeTransfer here.

The Bill will act to preserve mutual ownership by ensuring that assets may only be used for the purpose they were intended. This would ensure they cannot be distributed to members or third parties, and thus disincentivizes demutualisation. The full debate can be read here.

We would also like to thank Richard Fuller MP, Peter Gibson MP, Chris Clarkson MP, Anna McMorrin MP, Sally-Ann Hart, Danny Kruger MP, Andy Carter MP, Dr Luke Evans, and Anna Firth MP for their contributions, as well as Tulip Siddiq MP’s welcome support from HM Opposition.

We warmly welcome the Economic Secretary, Andrew Griffith’s response: “confirm(ing) that we will support it because we believe in, understand and recognise the contribution that the mutual model makes to society and financial inclusion, which is important to hon. Members on both sides of the House, and the diversity that it provides for the financial services sector.”

The Bill received strong cross-party support with Richard Fuller MP stating that it is “an important responsibility of Government to maintain a structure of legislation that enables each of those organisational structures to thrive and prosper. Such organisations are the essential “little platoons” of the Burkean view of Conservative ideals and of the co-operative ideals of the Labour Party.”

Sir Mark Hendrick MP stated that: his “Bill will introduce new provisions to maintain the destination of the capital surplus to ensure that where a mutual’s rules make the capital surplus non-distributable, any resolution to convert it into, amalgamate with or transfer engagements to a company shall also include a provision to transfer the capital surplus, as provided by the rules in the event of a solvent winding up.”

Danny Kruger MP said: “I welcome the Bill…not all capital is fungible. It is not appropriate to allow all capital to be blown to the four winds at the whim of speculators and investors. It is important sometimes to lock capital in the places where it belongs, for the benefit of the people it was invested for.”

Peter Gibson MP also spoke in support of the Bill stating that: “Australia’s Treasury Laws Amendment (Mutual Reforms) Act 2019 introduced new mutual capital instruments (MCI). Under the 2019 Act, share owners in Australia are limited to one vote per member regardless of how many MCIs the owner holds. The Act also introduced a clarification that the issuing of MCIs does not amount to demutualisation by the organisation for tax purposes, I would be interested to hear the Minister’s thoughts on that Act and its relevance to any legislation that might be appropriate for the UK’s mutuals sector.”

Anna Firth MP said: “Co-operatives, mutuals and friendly societies are a wonderful resource embedded at the heart of our communities. They expand opportunity, wealth and aspiration throughout our great nation. They are democratically owned and controlled by their members, with profits reinvested in the organisations or among their memberships.”

Mutuo Managing Partner Peter Hunt said: “We welcome the level of support from across the House and look forward to working with Members of Parliament as the Bill progresses.”

Demutualisation and how to stop it

Demutualisation has ripped through many countries’ mutual sectors, as people have sought to cash in on many decades, even centuries, of legacy assets that were built up by generations of members. Yet it has not happened everywhere and there are lessons we can learn from those countries with large co-operative and mutual sectors.

In this new publication Mutuo’s Peter Hunt examines the history and impact of demutualisation, the stated reasons given for it, and explores in detail last year’s failed attempt to demutualise the UK’s second largest mutual insurer, LV=. The document concludes with a toolkit which sets out clearly how demutualisation can be stopped by a mixture of member action, media spotlight and political support.

View the document

New Bill to enhance operating environment for co-ops and mutuals

Sir Mark Hendrick MP

A new Bill will has been introduced in Parliament this week which proposes a way for co-operatives, friendly societies and mutual insurers to grow and develop their businesses while securing their commitment to member ownership and control. The Bill was formally introduced by Preston MP, Sir Mark Hendrick.

The Co-operatives, Mutuals and Friendly Societies Bill has been designed to meet a range of objectives.

For co-ops:

·      A new permanent share

·      An option for legacy reserves to be indivisible

For mutual insurers and friendly societies:

·      Tax neutrality for Mutuals Deferred Shares

·      An option for legacy reserves to be indivisible

For friendly societies:

·      Modernisation updates to 1992 Friendly Societies Act

It takes forward a key recommendation of The Ownership Commission and builds on similar legislation seen in other parts of the world. Second Reading will take place on Friday 28th October.

Mutuo’s Managing Partner, Peter Hunt, said, ‘This Bill seeks to amend the capital regime for co-ops and community benefit societies, to permit the injection of external capital, while securing their mutuality.  It also brings friendly societies law up-to-date and establishes tax neutrality for Mutuals Deferred Shares. Sir Mark’s Bill offers to enhance the operating environment for co-ops and mutuals so that they can continue to serve their members and offer more choice and competition in their markets.’

A victory for mutuality as members reject the private equity raid

The decision by LV= members to reject the proposed sale to Bain Capital is a major boost for mutuals everywhere.

Members voted to support their customer-focussed business purpose, and reject a transfer to profit-maximising private equity owners.

It’s a vote of confidence in mutual, equitable, business, and sends a warning to potential corporate raiders that mutual members will not submit meekly to their advances.

Mutuo is delighted at this outcome, having campaigned against the proposal for the whole of 2021. Its decision in January to propose an inquiry by the APPG for Mutuals into the demutualisation, ensured that proper scrutiny was assured.

Led by its Chair Gareth Thomas MP, the Group exposed the weakness of the case put forward by the Board of LV=, which would have seen the 178 year old mutual asset stripped by private equity.

The persistent campaigning by Daily Mail business journalists Archie Mitchell and Lucy White was supported by media from across the spectrum. The only comments in favour of the deal came from people bought and paid for by management, using members’ money, of course. Otherwise, the criticism was unanimous. It was a rotten deal.

This whole affair has exposed the weakness of the legal and regulatory framework governing mutuals. Government, which has sat on the fence throughout this affair, must now act.

  • Mutuals need to be able to raise investment capital without demutualising. Treasury should fully enact existing legislation without delay.
  • The process of regulating demutualisation proposals also needs to be overhauled, so that members’ interests can be fully respected.
  • Incentives to demutualise also need to be removed. As long as there are unprotected legacy assets, there will be people determined to loot them who did not invest or contribute to them in any way. The law must step in now to ensure that they are preserved for the purpose they were intended.

Mutuo will now pursue this reform agenda with vigour. If you agree with us, come and help.

APPG Chair, Gareth Thomas MP, secures Commons adjournment debate on the future of LV=

Gareth Thomas MP, chair of the APPG for Mutuals, spoke in Parliament yesterday evening about the demutualisation of LV=.

He argued that in the case of LV=, there has never been “a clear, easy to understand, reason why demutualisation is needed. The business is well capitalised; indeed, it recently sold its general insurance business for over a billion pounds. It has raised significant sums on the capital markets. Both the chairman and chief executive argued the business was in very good financial shape up until their plans for putting Liverpool Victoria up for sale were leaked to the media…”

Mr Thomas also used the debate to emphasize how LV= members have been excluded from the process so far. He stressed that members have a right to know precisely why this sale to Bain Capital is happening, especially as the private equity firm has no experience in running a financial mutual.

Mr Thomas went on to mention how the conversion from a friendly society to a company limited by guarantee, and the decision to demutualise are intimately linked and should be understood as so by regulators. He remarked how “the failure to consider interlinked business decisions was a “fundamental failure identified by Dame Elizabeth Gloucester in her devastating report into the LC&F debacle.” The failure of regulators to see how these two events are connected “appears to be a clear repeat of that mistake.”

The APPG for Mutuals will continue working to ensure that LV= members are consulted on what is happening, and that corporate diversity is championed.

The debate can be read in full on Hansard.

How do investors view the importance of sustainable business?

By Louis Attlee

The Global Mutual Leaders’ Symposium was held in London and Sydney on 8th September. It was an opportunity for leaders from both countries to come together to discuss mutual business purpose and how best to engage with the growing focus on ESG frameworks and investing.

After opening remarks from Melina Morrison, CEO of the Business Council of Co-ops and Mutuals in Australia and Peter Hunt, Managing Partner at Mutuo, a consultancy for co-ops and mutuals, the talks kicked off with Geoff Summerhayes, Senior Advisor of the Pollination Group.

Geoff spoke about how “fossil fuels are embedded in everything…” which must come out if net zero becomes more than a distant possibility. One of the running themes of the whole event was leadership, and Geoff honed in on this astutely, emphasising the need for management to take the lead on building buy in with members and communities.

Next was Jonathan Labrey, Chief Strategy Officer at The Value Reporting Foundation, the leading global standard setter for sustainability reporting. Jonathan outlined the history of corporate reporting frameworks, and he communicated how the different epochs of corporate reporting inform our current approach to the question.

Since the millennium, Jonathan argues, we have seen the transition from a scramble to include all global risks of a seismic nature into a framework, what he called the “end game phase”. Then came moves to incorporate the “six capitals” which represent the needs of all involved in a sustainable business environment. Currently, efforts are centered on moving away from thinking about ESG as a silo, to more of an overarching business strategy. Jonathan expects big things from COP26, where he wants to see solid steps towards global alignment on ESG reporting. We agree, and see a crucial part to play for co-ops and mutuals in contributing to this agenda, and not getting lost in intellectual debates which have preceded earlier conversations on ESG.

Barry O’Dwyer, Group CEO of Royal London Insurance, came after Jonathan, and he took more of a cautionary tack in emphasizing what he called a just transition towards net zero. Barry was careful to outline the need for good stewardship of this new agenda, “partly it is the right thing to do, partly because we need people from all parts of society to come with us on this journey.” We couldn’t agree more.

Barry has inherited a rich history of ethical investment at Royal London, which has the longest track record of ESG investments in the UK. By investing in the right businesses, who care about communities and the planet, financial mutuals such as Royal London play a big part in shaping a better future, while corporate competitors who are forced to comply to shareholder directives.

In a mutual bank, commercial success and customer prioritisation are the only two objectives of management, no shareholders means less pressure on management to deliver other objectives which exist with corporate competitors.

Louise O’Brien, CFO of Bank Australia also sees this as a major advantage. In terms of the operational running and marketing of Bank Australia, Louise simply commented that they don’t “try to compete with corporate competitors, we simply continue to raise our own standards…” On becoming a B Corp, Louise adds this transition “didn’t mean changing what Bank Australia was doing, it just meant communicating our strong track record as an organisation.”

Rohan Lund, CEO of the National Roads & Motorists’ Association, followed Louise’s contributions to the symposium who in true Aussie style, was uncompromising in how he described the core strength of coops and mutuals: they “Can’t be bought, can’t be bullied.”

Like all businesses coops and mutuals exist to make owners happy, but unlike competitors, the owners and customers of coops and mutuals are one and the same and of a much broader demographic of the overall population. This means they are at a structural advantage when taking on competitors, especially in the long-term.

Esther Kerr-Smith, CEO of Wealth and Capital Markets at Australian Unity was next. She argued that “lifelong wellness, economic empowerment, and community connectedness” are the three tridents by which Australian Unity conducts itself.” Also, the reality of no shareholders means these objectives are delivered, not just talked about.

Dialing in from Manchester, Ruth Woodall, the Sustainability Reporting Manager for the Cooperative Group, was sharp in her analysis of why standardized metrics are important to “make sure ESG is not just a box-ticking exercise”. She presented the Co-operative Group’s globally recognized sustainability report for the audience.

This is important given Colin Melvin from Arkadiko Partners UK was up next and used his experience of being involved in ESG from the get-go to explain why ESG needs to be driven by coops and mutuals so it does not become the new CSR. What we all need is evidence of change, towards articulation of actual impacts in the real world. Climate change action needs to find its “nexus in the space between governments and industry”, so words are matched to actions.

Jim Parker represents, Dimensional Fund Advisors, and was keen to emphasise the importance on maintaining good quality data, partly  because different ESG measurements do different things, but also so that coops and mutuals are proactive in aligning themselves and partners to ESG strategies.

Hans Georgeson, CEO of Royal London Asset Management, is clearly very excited by the change that is currently happening, but he is also keen to show this doesn’t mean business has to suffer as a result. It is important that “mutual asset managers remain profitable so that more dividends are transferred to financial mutuals, so that members continue to receive market leading financial products.” Hans is keen to move away from passive index tracking, towards ‘tilts’ which are meant to help partners who are willing to transition, but who maybe have a history with fossil fuels, for example. His three main tips for those involved in the ESG transition were; 1. Make your money count, 2. Make your votes heard at a board level, including actions such as divestment, and 3. Make sure to engage with staff and clients because they will reward you.

Hans, like the earlier speaker has worked for corporates most of his life. The transition, he describes, “coming from a PLC world to a mutual world is a breath of fresh air.” This still means marketing is essential, and “how you represent yourself in the market place in the UK must be in terms of longer terms profit horizons which can be fed back into services”, rather than relying on the ‘goodness’ of the business purpose. This tallies with Mutuo’s view, that co-ops and mutuals must prove their worth to society, rather than relying on the clarity of their purpose.

As announced at the end of the event, BCCM is launching its new ESG project for co-operatives and mutuals. The program will commence next month and I would like to invite your business to participate as a project partner.

Download the brochure

If you would like to talk to us about this, please contact or

The private equity threat to co-operatives and mutuals

As long as legacy assets can be appropriated, co-operative business will remain a target for demutualisation

Demutualisation occurs when a co-operative or mutual converts into a proprietary company.

The main justification given for demutualisation has been a lack of capital or scale that is not available to the business in its mutual form. Demutualisation inevitably alters a business’s corporate purpose. It will no longer be committed to delivering the best value to members and instead will join the majority of businesses as one that is focussed on delivering value to its investor shareholders.

The impact of demutualisations in the past has been to the detriment of members, particularly over the longer term. The requirement to service shareholder capital is a drain on business and means that there will be less money for members to benefit from. Short term payments for loss of membership rights are soon recouped through higher costs and lower benefits in a proprietary firm.

Beyond its own members, demutualisation also effects the wider industry and competition and choice. For markets to work for the benefit of all requires that the various corporate models each enjoy the necessary critical mass, defined as the degree of market share necessary to enable that model to operate successfully and thus to provide real competitive pressure on the other players within the market.

The lived experience of most demutualisations is that following conversion, board and executive management were quickly rewarded through increased remuneration and share options. The rationale for the conversion, that they needed additional capital to develop the business also fell away, as soon after, most business ceased to trade as independent entities as they were merged into larger consolidated groups. Of the few that remained independent, some saw their own spectacular collapses, as seen at Northern Rock in the UK and AMP in Australia.

Demutualisation is bad for members, for competition and choice and for market stability

Co-operatives and mutuals operate different business strategies, helping to mitigate against the overall risk of these firms in the sectors they operate, and therefore to the wider economy. It benefits economies if this diversity of risk means that businesses are not all chasing the same short-term business objectives, and risking a herd mentality, which if flawed, carries significant risk for the economy. The global financial crisis is testament to how differently owned and purposed businesses behaved.

Over time, co-operatives and mutuals consistently provide better value products to their members because their businesses are focussed on long-term plans enabling them to provide price competition against profit-maximising competitors. The existence of co-operatives and mutuals in markets dominated by proprietary competitors means that they are able to provide the only meaningful competition on the basis of service proposition and price.

Legislation can incentivise demutualisation

In many jurisdictions, legislation governing co-operatives and mutuals incentivises demutualisation. It does this by permitting legacy assets to be distributed. Legacy assets have been built up over generations of membership and often constitute a significant part of the working capital of the business. Current members usually have not contributed to this capital base but have enjoyed the benefits of previous years of successful trading.

In some countries, legislation does not permit the distribution of such capital. Instead, the capital must be used for the purpose intended by the original founders or otherwise transferred to a different co-operative or mutual organisation. In those jurisdictions where legacy assets are not available for distribution, demutualisation is extremely rare and as a consequence, large co-operatives and mutuals maintain their member ownership, reflecting significant mass in a range of markets.

In some countries such as the UK and Australia, however, there are no legislative restrictions on the distribution of assets and as a result, waves of demutualisation have occurred, starting in the late 1980s and 1990s. In these countries, in order to protect legacy assets and the purpose of the business, co-operative and mutuals often adopt constitutions which require a high threshold member vote to permit a transfer of ownership. This works to an extent as a deterrent to demutualisation but is vulnerable to rule changes.

The process of demutualisation

Demutualisation has typically been proposed by boards of directors of co-operative and mutual businesses. It is extremely rare for a demutualisation to be proposed by members although the exception to this would generally be in agricultural co-operatives where there is more of a direct link between the membership and the original investment in capital.

The favoured method for demutualisation in these jurisdictions is to transfer the co-operative or mutual into a proprietary company, either with shares allocated to existing members or alternatively, compensation paid for the loss of membership. In this way, members are rewarded to vote for the transfer.

This compensation paid rarely reflects the underlying capital value of the business. In fact were it to do so, it would remove the logic for the transfer, which is to gain control of underlying capital assets. It is common therefore for this payment to reflect the perceived value of membership, or in other words, the amount that the board estimates is necessary to pay members to vote for the conversion.

A less common but equally effective route to demutualisation, involves the sale of the mutual to an external entity. This is much more frequently used in the United States, where the process is formalised and is known as a sponsored demutualisation. As such it has more in common with a hostile takeover bid, though in many cases the external approach is supported by the co-operative or mutual’s board.

One such example is the current live transaction involving Liverpool Victoria (trading as LV=, a mutual insurance company based in the UK) and Bain apital, where the business was put up for sale and Bain was selected as the purchaser, thus necessitating a full demutualisation. Prior to the sale being offered, LV= altered its constitution to remove the ‘poison pill’ high demutualisation threshold. At the time of this change, members were assured that there were no plans to abandon the mutual status of the firm.

It is clear from this experience that the continued protection of legacy assets can only be assured through legislation. Co-operatives and mutuals should have the opportunity to choose a form of constitution that cannot permit the distribution of legacy assets. Members would remain entitled to the share of capital to which they have made a contribution, but no more. We expect that this would successfully remove the incentive to demutualise.

Private equity: a clear and present threat

The interest that Bain Capital is showing for the UK mutual insurance sector reflects the evident motivation private equity sees in accessing assets built up within co-operative and mutual businesses. Separately, JC Flowers, which had previously driven the demutualisation of Kent Reliance Building Society has joined with Bain Capital to bid for the Co-operative Bank, which was demutualised and sold to hedge funds in 2014.

These moves by global private equity reflect a clear and present danger to well capitalised co-operatives and mutuals. Demutualisations will be attractive where assets are held, and stakeholders can be persuaded to walk away. Fundamentally, the legacy capital assets belong to past generations, current generations and future generations of members and were never intended to be distributed at one moment in time.

Fundamentally, the legacy capital assets belong to past generations, current generations and future generations of members and were never intended to be distributed at one moment in time.

We recommend that co-operatives and mutuals ensure that they have contingency plans in place for any hostile interest from global capital funds and take appropriate action before this becomes a trend:

• Ensure that a defence strategy is in place in advance of any approach being made
• Establish a strong member value proposition to contrast with any approach
• Maintain strong constitutional requirements to guarantee high member voting thresholds
• Join with others to lobby for legislative change to disincentivise the raiding of legacy assets

Peter Hunt is Managing Partner at Mutuo.

Talk to if you would like to discuss this further, to equip your business to repel approaches from capital funds.

Mutual, fan ownership in football

The European Super League was the inevitable result of government inaction on football club ownership

The debacle of the European Super League once again brings to the fore the troubled question of football club ownership.

Established as community groups over a century ago, many professional football clubs have morphed into big businesses that are now focused entirely on revenue and profit opportunities.

The handwringing from English football authorities over the proposed breakaway was a bit late in the day. It should be no surprise to them that the corporatisation of football would lead to this.  The warning signs have been there for years, with landmark issues from the public listing of football clubs through to the purchasing by oligarchs and hedge fund investors.

These are people who are interested in finding an investment rather than supporting the sporting endeavours of a club for its own sake.  Their ownership of a football club is not just foreign based on their nationality, but on their personal objectives for the club.

It is a financial transaction pure and simple, as evidenced by their desire to do away with the jeopardy of competition. This is incompatible with football ownership and should rule them out as unfit to be proprietors of clubs.

The problem is deeper than the super league participants, however. The arrogance of football owners ignoring the interest of the clubs’ fans has long been a problem. Even as consumer businesses, they have failed to nurture and support long-term relationships with their customers. With a few exceptions, clubs are subject to a merry-go-round of fortune, depending on how benign the current owner is.

It is significant that no German club participated in this circus. Bundesliga rules insist on 51% supporter ownership of their clubs. They do not and never will exist as vehicles for investment, because they are rooted in their communities.

It’s over 20 years since we set up Supporters Direct in the UK and progress is glacial. We have some fan owned clubs and board representation, but it has been hard fought on an individual basis. This is because real reform has not happened either from football authorities or government. Leaving it to the fans can only go so far if the odds are stacked against them.

The UK government is now reviewing this again. Maybe change will happen but that means facing down the big money.  Real reform is regulation of how clubs can be treated as investment commodities and fan control as exists in Germany. 

In 2014 the All-Party Parliamentary Group for Mutuals made many of these points to the Football League, the Premier League, UEFA and the government. It said that the prevailing attitude on ownership was problematic then and it is now proving to be disastrous.

It made a number of recommendations, none of which have been acted upon. Had they, we would not be in this situation today. Its recommendations were:

  • Football authorities should undertake a joint study of football club ownership in other countries, including for example the Bundesliga, in order to understand the effect that different ownership structures have on the corporate behaviour of football clubs.
  • Football authorities should adopt a policy of promoting supporter involvement and ownership in football clubs as a strategy for building trust and confidence for the long term.
  • The Football industry should pay for the work of Supporters Direct (now within the Football Supporters Association) on the basis of a fixed percentage levy on transfer fees. This could also cover other community activities and remove the self-interested discretion from the decision-making processes.  
  • FA and League rules should be altered to protect the legacy assets of football clubs. (club colours, club name, home ground ownership and the rights to securitise assets).   If this does not happen, Government should legislate to include such protections and to extend the right to bid for community assets to a right to buy for supporter groups.
  • The Government should consider legislating for the changes it wishes to see in the ownership and governance of the football industry. ( protect minority supporter stakes in the case of a compulsory purchase order).

It is important to drive home the issue of supporter ownership to protect and maintain the fundamental purpose of a football club. Which is, for the avoidance of doubt, to play football- competitively- for the entertainment of supporters.

None of these issues are new and for years, Government has treated the football authorities with kid gloves by ignoring serious proposals for giving fans a say in their clubs. Inaction has consequences.  This time, there can be no excuses.

Peter Hunt from Mutuo
Peter Hunt is Managing Partner at Mutuo

APPG for Mutuals new report: Inquiry into the planned demutualisation of LV=

The All-Party Parliamentary Group for Mutuals [APPG] has today released a new report into the planned demutualisation of LV=.

LV=, one of Britain’s biggest financial mutuals, founded in 1843 and trading for most of its life as Liverpool Victoria, is well known across the UK.

In December 2020 LV= announced that it had reached an agreement on the terms of a sale to Bain Capital, a leading U.S. private investment firm specialising in Private Equity.

The APPG, which has over one hundred members from both Houses of Parliament, found that:

  1. It is very difficult for an individual member of LV= to be able to assess whether the demutualisation proposal is in their interests or not.
  2. On the basis of the evidence available to us, the Group concluded that the Leadership at LV= has not been open and transparent with the members about its intentions for the company.
  3. The fact that the board will move ahead to conclude a deal with Bain Capital in advance of providing any meaningful information to its membership shows a disregard for the interest of members and a cavalier attitude towards the member governance of this business.
  4. The planned demutualisation damages the diversity of financial services providers in the UK and weakens the mutual sector unnecessarily.
  5. Regulatory authorities do not appear to have so far acted fully in the interests of members, consumers and the wider economy.

APPG Chair, Gareth Thomas MP, said “What’s clear from the Group’s findings is that this demutualisation, like those before it, appears to be wholly unnecessary. We know from past experience that demutualisation is bad for members, customers and for the economy more widely. LV=’s planned sale to Bain Capital appears to be following the same pattern. The report finds that LV= has been unclear in its communication to members about its commitment to mutuality, the future business plan and the need for capital. At the very least LV= should now engage directly with members to explain the rationale for demutualising.”

View the report

Mutuo provides secretariat to the APPG for Mutuals. Find out more here.

Potential sale of LV= to Bain Capital

The All-Party Parliamentary Group (APPG) for Mutuals is today [8th February] announcing an inquiry into LV=’s recent decision to sell to Bain Capital.

LV=, one of Britain’s biggest financial mutuals, founded in 1843 and trading for most of its life as Liverpool Victoria, is well known across the UK.

The inquiry will consider whether LV=’s proposals are good for policy holders, for competition and for the business.  LV= has itself described the deal with Bain as “an excellent financial outcome for all of our members.”

Launching the inquiry, Gareth Thomas, MP for Harrow West and Chair of the APPG said:

“Members of the parliamentary group are concerned at what impact the sale will have on LV= members, the insurance industry and competition and choice in financial services. We are also interested in whether the LV= decision reflects weaknesses in the Government and regulators’ views and support of mutuals.”

The APPG will seek evidence from mutual sector experts, financial analysts and from LV= itself.  The Group is keen to hear from other individuals and organisations and with an interest in this Inquiry. The deadline for the submission of written evidence is Friday 5th March and the APPG plans to hold a number of oral evidence sessions in the first quarter of 2021, before publishing its inquiry report. Evidence can be submitted to the APPG Secretariat at

Inquiry Terms of Reference

The APPG will consider, and is keen to understand:

  1. The context of why at this time the status quo is not good enough, given LV=’s brand strength, capital and momentum.
  2. The impact that the sale will have on LV=’s members, the insurance industry & the implications for competition & choice in financial services more widely.
  3. The rationale that supported the decision by the Board of LV= to sell the business to Bain Capital, and whether other options were considered fully.
  4. The motivation behind LV=’s recent conversion from a friendly society to a mutual company, including how this is connected to the proposed demutualisation.
  5. The wider legislative framework for Friendly Societies and Mutual Insurers, with a particular focus on barriers to raising capital, protection from demutualisation and attitude of Government and regulators.

Measuring the Value of Mutuality

As values-based businesses, co-operatives and mutuals need to be able to describe and quantify the benefits that their mutual business structure brings to customers, stakeholders and the wider society.

The Australian Business Council of Co-operatives and Mutuals (BCCM) has worked with Monash University to develop a new way of measuring this positive impact – the Mutual Value Measurement (MVM).

Mutuo Mutual Value Measurement

Mutuo develops new Mutual Value Measurement Consultancy package

As the first authorised implementer of MVM, Mutuo has now developed a new consultancy package to help co-operative and mutual businesses to apply the six dimensions of mutual value to their business:

  1. Commerciality
  2. Member relationships
  3. Shaping markets
  4. Community relationships
  5. Ecosystem and reciprocity
  6. Mutual mindset

Our consultancy service is designed through a 4-step package that helps co-operatives and mutuals to understand the tool and to apply it within firms:

  • Step 1 – Baseline review of business
  • Step 2 – Online Workshop with key leaders
  • Step 3 – We produce a Mutual Value Report Statement
  • Step 4 – Consider feedback and finalise statement

In the current social distancing environment, this consultancy is delivered via video conferencing and online methods.

Find out more about MVM and the consultancy package:

View PDF brochure

While this package has been developed with Australian businesses, MVM works for any co-operative or mutual, wherever you might be based.

Contact us today to find out more.

New report recognises the leadership and resilience of Australian co-ops and mutuals

The Business Council for Co-operatives and Mutuals has released a landmark new report, Leading the Resilience: Co-operatives and mutuals through COVID-19.

View the report

This report, authored and researched by Mutuo, highlights important differences between the response of Australian mutuals to crises when compared to investor-owned businesses. 

Mutuo’s Peter Hunt said:

“This research demonstrates clearly how co-ops and mutuals operated through the challenges of COVID-19. We spoke with CEOs from across the sector and were struck by their common focus on continuing employment for their staff and providing real support and guidance for their members.”

The report also finds that Australian co-ops and mutuals are 25 per cent longer lived than their ASX listed counterparts.

In response to COVID-19, co-operatives and mutuals have:

  • bailed in, rather than being bailed out, investing from their balance sheet to aid the recovery
  • been job keepers, moving strategically from the outset to retain employees through redeployment, rather than implementing mass lay-offs
  • implemented mental health strategies for members, customers and staff

Watch a video preview of the report from author Peter Hunt.

First offer of Mutuo-inspired capital instrument in Australia

We are delighted to see the first offer of Mutual Capital Instruments in Australia.

Australian Unity has published an offer of $100 million of Mutual Capital Instruments to help fund the growth of its business. It is the first Australian mutual to take advantage of new legislation passed in April 2019 which created this new type of mutual share.

Mutuo was instrumental in the design and implementation of the project which brought about the new share:

  • Conceived of the project
  • Entered into a partnership with the Business Council of Co-operatives and Mutuals
  • Formed a project team of leading Australian co-operative and mutual businesses to drive the initiative forward
  • Worked with lawyers and funding experts to design the new mutual capital instrument
  • Negotiated with Federal Treasury officials and ministers
  • Helped to build bipartisan support for the new legislation
  • Assisted Parliamentarians in its passage through the Federal Parliament

Commenting on the news, Peter Hunt, Managing Partner of Mutuo said,

Peter Hunt from Mutuo

“Today is the culmination of four years’ work and just shows what can be achieved by co-operative and mutual businesses working together with their peak body to deliver a real change in legislation. The new mutual capital instruments draw upon the best experience of co-operative and mutual fundraising from across the world.

The new capital will facilitate growth and innovation in the best Australian co-operatives and mutuals, supporting the continued success of the sector. Mutuo’s mission is to improve the business environment for co-operatives and mutuals and we are delighted at this development. We wish Australian Unity all the best in their pioneering effort.”

For more information, contact Peter Hunt.

Co-operative Farming: Blueprint for future proofing Aussie farmers

Throughout 2020 Mutuo worked on a new project for the Australian Business Council of Co-operatives and Mutuals designed to support farmers, fishers and foresters through the formation of new farming co-operatives and to foster the resilience and growth of established farming co-operatives.

The project saw a series of roundtables with Australian agricultural co-operative leaders examining some of the sectors key challenges as well as opportunities for future growth.

In September 2020, working closely with these agricultural leaders, Mutuo produced a Blueprint for future proofing Aussie farmers which identified why co-ops are good for Australian farmers, Australia’s regions and Australia as a whole.

View the PDF

A plan for economic growth through co-operatives

In August 2020 Mutuo worked with the Business Council of Co-operatives and Mutuals (BCCM) to produce their Pre-Budget submission to the Australian Federal Government.

Recovery Through Co-operation is a plan for jobs, growth and manufacturing, which would be delivered through a number of regional co-operative development clusters. The two identified growth zones would be built around already successful major co-operatives in Northern New South Wales and Western Australia.

The program consists of a plan to facilitate inter business collaboration on supply chains and exports, by accelerating business opportunities and mobilising investment capital into Australia’s regions.

View the PDF

Free Webinar: Policy Guides for Co-operatives and Mutuals

Over the past decade Mutuo has produced a series of policy guides, helping to improve the business environment for co-operatives and mutuals.

As a central part of a communications plan, these guides improve lobbying by sharpening our messages and by clarifying our joint objectives.

They have had a real impact, leading to better relations with government, new policy initiatives and improvements to legislation.

The guides have been produced for national representative bodies in the UK and Australia, and for global business sector bodies such as the International Co-operative Alliance and ICMIF.

In this presentation, Mutuo’s Mark Willetts sets out how and why these guides were created, how they help to influence, and what they have achieved.

So please check out the webinar,  if you’d like more information about how we can help you, please get in touch.

UK Parliament considers new co-operative capital Bill

A new Bill will be introduced in Parliament today [Wednesday 5th February 2020] which aims to facilitate more capital investment into co-operatives. The Bill, brought forward by Cardiff North MP, Anna McMorrin, will be read for a first time in the House of Commons on Wednesday 5th February.

The Co-operative and Community Benefit Societies (Environmentally Sustainable Investment) Bill proposes a way for co-operatives to grow and develop their businesses whilst enhancing their commitment to member ownership and control. Also known as the Green Share Bill, it will focus new funds on environmentally sustainable investments within this important business sector.

The Bill also introduces new provisions including an option restricting the demutualisation of co-operatives into companies and the distribution of their legacy assets.

It takes forward a key recommendation of The Ownership Commission and builds on similar legislation seen in other parts of the world.

Mutuo’s Managing Partner, Peter Hunt, said,

‘The challenge has been to amend the capital regime for co-ops and community benefit societies, to permit the injection of external capital, whilst enhancing their mutuality.  We can point to existing examples of where this has been achieved in other countries such as Canada, Australia and The Netherlands. 

Anna McMorrin’s Bill offers an important step forward for these mutuals, helping to make the business model even more popular for co-ops which are keen to take advantage of their high levels of trust among customers and members.’

New report: Who Owns Europe? … and why it matters for Progressives

Who Owns Europe
Who Owns Europe? ... and why it matters for Progressives

Ownership matters. Owners of businesses set the strategic direction, purpose and the terms of employment. Owners of land decide what should be done with it and who can access it. Owners of property decide how it is deployed and who can enjoy its benefits.

But increasingly, ownership is being concentrated in fewer hands, shifting ever more from shared ownership towards private corporations and individuals.

Government policy across the EU takes little or no account of the shifting nature of ownership. It is time to make sure that ownership works in the maximum public interest, serving citizens, customers and employees alike.

Who Owns Europe?, a new report from FEPS/Mutuo launched today, examines ownership across the European Union. It considers how Europe’s businesses are owned and where the benefits of business flow. It looks closely at different types of corporate ownership and the effect they have on fairness and equity.

View the report in full

The report makes a series of recommendations aimed at ensuring strong economies which benefit the wider public good and recommends that progressives should promote policies that:

  • Encourage corporate diversity to ensure that businesses for public benefit are recognised in national constitutions or other supreme law
  • Ensure that the remit of government business and enterprise departments includes all types of business, including mutually owned and public purpose enterprise
  • Ensure that in all legislation, the role of and impact on different types of business forms are considered, rather than simply assuming one approach
  • Seek to ensure in particular, that co-operative and other fields of organisational law merit equivalent attention
  • Promote the appointment to ministerial and official posts, champions to represent different types of business
  • Explore incentives for encouraging those setting up new businesses to choose a public benefit business

The report concludes that we can only prevent Europe being taken over by an idea – that of the pursuit of private gain – if we move away from an economy dominated by business for private profit to one for public benefit.

Learn more about FEPS

A Manifesto for Mutuals: 2019 General Election Policy

Since the last General Election, UK Mutuals have enjoyed continued and welcome all-party political support. 

But there is much more to do to ensure that these important businesses can play a greater role in our economy and society and help to build a fairer country. 

By its policy, legislative and regulatory actions, the next Government can enable these businesses to fulfil their potential and deliver a wide range of public policy objectives. 

In this election, we call upon each of the political parties to promise to adopt our plan for action:

1. Recognise and support the value of diverse forms of enterprise in the UK economy 

2. Ensure that policy, legislation and regulation works to provide a fair business environment for mutuals: 

• Greater recognition and policy understanding of the sector by national and devolved politicians 

• A commitment to an enabling legislative environment for the sector in the UK 

• An understanding of where inappropriate regulation affects the sector and a commitment to address this where it occurs 

3. Work with Mutuo and other sector bodies to implement the objectives of the UK Mutual Economy Report 2019

Download the Manifesto