A "catastrophic failure of governance" had taken place at the Co-operative Group but it was in its own hands to "make this business work again", its group chair told delegates today.
Ursula Lidbetter, who took up the post at the end of last year, recognised the failures of the Co-op as she addressed its annual general meeting - ahead of the vote on Lord Myners' proposals.
She said: "I am in no doubt that we have it in our gift to set this society firmly on the road to long-term recovery.
"We have the opportunity today to commit ourselves to a programme of renewal that reinforces and refreshes co-operation and democracy in a way that also ensures professional oversight of a large and complex business with a £10 billion turnover, 90,000 employees and more than 3,000 stores.
"But for that to happen, we have to accept the seriousness of the mistakes we've made.
"And, even more importantly, the reasons why those mistakes were able to be made.
"We have to recognise that there has been a catastrophic failure of governance."
She went on to quote a line from its governance review which she said she agreed with - "the governance framework in which we have operated makes success all but impossible".
Ms Lidbetter said: "So, 2013 was a disaster waiting to happen. We had built it into our structure."
She said the central message of the commissioned reports of Lord Myners and Sir Christopher Kelly had been accepted by the board and she urged delegates to do the same.
"It's natural not to want to face up to bad news," she said. "There are recognised emotional stages that people go through.
"First there is shock and denial, then comes anger and blame, and then finally understanding and acceptance of what needs to happen.
"We have been shocked. We do feel angry. Now we need to understand.
"I recognise that the process we have gone through so far on reform has not been ideal.
"We have certainly not been helped by the serious crises caused by board leaks and resignations.
"But there is a need for urgency about what we must do next.
"We cannot endlessly debate this - our customers, our members, our employees, are demanding we set our house in order.
"And in addition, our bank lenders are awaiting the outcome of our governance deliberations with great interest.
"We may like to think that we control our business but because of our level of debt, the banks have more say in what we can do than any of us here. How tragic a situation is that?"
She added that from conversations she had and meetings held there was "a great deal that the vast majority of us already agree upon".
She said they all wanted to see group board directors with "the right skills to ask the right questions, make the right decisions, hold our management to account and importantly have the experience to give them wise guidance and support".
In conclusion, she told delegates: "Over the last year we have been a sorry sight for anyone who cares about Co-operation.
"We have collectively let a great many people down and we owe them a considerable apology.
"Good people have committed themselves to an ideal. Something they believed in with a passion.
"The governance structure has let us down. It's let down our 90,000 employees that depend on this business for their livelihoods; the eight million members who want to trust in our commercial integrity; the British public who thought we were different and better than the rest, and we've let them down too.
"We have tolerated a system that has proved unfit and that has led to a shocking devaluation of our society.
"But the difference between all of us in this room and everyone else touched by our terrible year is that we, and only we, have the power and therefore the responsibility to do something about it.
"We are the people, and we are the only people that can make good this mess.
"It's in our hands to make this business work again. We can restore its profitability and we can bring back the trust and belief in The Co-operative.
"We are at a very fateful point in the history of The Co-operative Group, and indeed the whole of the movement.
"It is imperative that we retain that passion for our Co-op that many of us have spent our lives committing to, but put it into a framework where it can be effective for our members now and for the future."