Leaky leadership and poor culture: Why we need to talk ownership

So water companies have been ordered to return ￡158 million to their customers after missing key targets on pollution and leaks, writes Co-operatives UK CEO Rose Marley. It brings into sharp focus the need for drastic change in how our essential services are run. The fines are a proverbial drop in the ocean after decades of underinvestment and - make no mistake - our bills will rise. Does that seem fair when we look back on a litany of big bonus payments and shareholders cashing in their dividends? And all the while it's our rivers, lakes, and ecosystems that are suffering. The regulator, Ofwat, has come in for some stick, but it's not just regulatory - it's a failure of values and culture.

Ofwat has sent out a clear message: these companies must address deep-seated issues around culture and leadership. The fact that values such as honesty, transparency, and social responsibility seem to have been absent from decision-making over decades is no accident. They don't exactly fit within a corporate structure where short-term profits for shareholders have been prioritised above all else.

So, is there a better way to run a business? It has been 180 years since the Rochdale Pioneers laid the foundation for what is now a global co-operative movement, built on values that are the antithesis of this profit-first mindset. The Pioneers understood that how a business is owned is fundamental to how it behaves. Ownership and values are intrinsically linked, and it’s no surprise that co-operatives and mutuals continue to demonstrate a fairer, more equitable, and sustainable way of doing business.

When a company is owned by its members - whether those members are workers, customers, or the community - it operates with a fundamentally different purpose. Decisions are made with a long-term view and with the interests of the collective to the fore. Profits are reinvested into the business, benefiting people and the planet, rather than flowing into the pockets of shareholders.

Co-operatives exist to serve their members, and that’s why they’ve consistently shown they can deliver more resilient, ethical, and socially responsible outcomes. When you compare this model with what we’ve seen from the corporate ownership of essential services like water, the contrast is stark. Yet, as brought to life in our Co-operative and Mutual Economy 2024 report, co-operatives (and mutuals) make up less than 0.5% of businesses in the UK. It is not enough. Thankfully, our current government has the same view, with its manifesto commitment to double the size of the co-operative and mutual economy.

With an environmental crisis and rising demand for businesses to step up to their social responsibilities, co-operatives offer a proven, people-centred alternative. We need a system where businesses put purpose over profit, where success is measured not by shareholder returns but by the well-being of communities, ecosystems, and future generations. As we celebrate the 180th anniversary of the Rochdale Pioneers, let’s reflect on reasons why their vision continues to resonate today. The co-operative movement isn't just about a different form of business, it's about reshaping our economy and society to be fairer, more sustainable, and better equipped to meet the challenges of the future.

The failures we see today in industries like water are, at their core, failures of ownership and values. If we want different outcomes, we need a different approach. Co-operatives offer that approach.