Former City minister Lord Myners welcomed the vote
Co-op Group representatives have voted unanimously in favour of proposals to overhaul the way in which the 150-year-old British mutual is run.
At a special meeting in Manchester, delegates approved a motion calling for elected board directors and greater powers for individual members.
The proposals broadly reflect reforms called for in a report by ex-City minister Lord Myners, who called the Co-op "manifestly dysfunctional".
The group lost £2.5bn last year.
It has been mired in controversy, with its banking arm facing near-collapse last year, and the resignation of chief executive Euan Sutherland in March.
Co-op Group's chair, Ursula Lidbetter, welcomed Saturday's vote, calling it a "highly significant moment" for the organisation.
She added: "There is a huge task ahead of us if we are to deliver the reforms necessary to restore the group's reputation and return it to health, but the board will work hand-in-hand with our members to ensure that we seize this opportunity."
The Co-operative Group's meeting took place in its new head offices in Manchester
Following the vote, Lord Myners told the BBC his "work here is done," and that he was thrilled by the unanimous approval.
He said it marked a "turning point" for the group.
Four proposals
Following the standard annual meeting, a special session was held to vote on a motion containing the following four proposals, which reflect some suggestions made by Lord Myners:
- The creation of an elected board of directors, comprising people with relevant experience to run an organisation like the Co-op
- The establishment of a structure that gives Co-op members powers to hold the board to account
- Moving to a "one member, one vote" system, in which members can directly vote on policies
- The introduction of rules to protect against de-mutualisation
That motion was backed by Co-op Group chair Ms Lidbetter and interim chief executive Richard Pennycook.
The details of the proposals will now be refined and put forward to members at an upcoming meeting.
There is a Co-op food store in every UK postal area
Earlier this month, a review of the group by Lord Myners concluded the board was "manifestly dysfunctional".
The report suggested replacing it with a smaller board made up of people with business experience.
Lord Myners called the Co-op Group "one of the great national business calamities", and said "radical decisions on governance structure need to be taken very soon - and with resolution - if the Co-op, as my mother knew it, is to be saved".
He added that elected members would have to show "selfless sacrifice" to push the reforms through.
Euan Sutherland, who resigned as boss of the Co-op Group in March after 10 months in the job, said the organisation was "ungovernable".
Fall from grace
Co-op Group's former chief executive, Sir Graham Melmoth, who stepped down in 2002 having been credited with reviving the organisation's fortunes, told the BBC "most people will find something that they can generally support" in the motion.
"I'm immensely disheartened and sad that a great institution has got to this stage," he added.
"It wasn't so long ago that the balance sheet looked very respectable. You could take it anywhere - its covenant was absolutely first-class - now it's a great fall from a great height and we've got to get back there."But Sir Graham insisted that governance reforms were "almost secondary" to battling the levels of indebtedness at Co-op Group, with the banks "sitting on the neck" of the beleaguered mutual.
Although the Co-op has nearly eight million members, making it Britain's largest mutual, only a few hundred got to vote in Saturday's meeting.
Unlike in corporate companies, where each share entitles the holder to one vote, Co-op members vote for their regional representatives, who in turn vote at the annual general meeting.
8:25 AM
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