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Ex-chief's hopes for Co-op reform

Former Co-operative Group boss Euan Sutherland has said he hopes his decision to quit will act as the catalyst for change among reluctant officials at the embattled mutual.

In an interview with the BBC, Mr Sutherland said that, while many elected officials on the Co-op's board would "talk the talk", he feared they would never back proposals for fundamental change at the group.

But he hoped his departure would force through reforms needed.

His acrimonious split from the Co-op this week, after less than a year in the role, has left the group without a permanent boss and facing the biggest governance overhaul in its history.

Mr Sutherland resigned on Monday, claiming the group was "ungovernable".

His decision came after he used an extraordinary Facebook rant at the weekend to blame "an individual, or individuals" at the top of the group for deliberately seeking to undermine him by revealing details of his £3.66 million pay deal to a Sunday newspaper.

He told the BBC that, while the pay leak had proved the final straw, he had long considered standing down, alleging that some of the elected officials - or so-called senior democrats - at the Co-op had deliberately sought to frustrate his reforms to governance.

It was the latest in a long line of leaks to the press, he claimed.

" The senior democrats talk the talk of reform, but in practice they won't do it," he said.

"My hope is that from the resignation will come healthy reform," he added.

His departure has already sparked a major overhaul of the Co-op management structure, with the group agreeing in an emergency call on Monday night to abolish the board in favour of a new "plc'' style board including only executive and non-executive directors, responsible for taking commercial decisions.

It came after former City minister and new board member Lord Myners brought forward details of his governance review proposals - not due to be announced until next month.

But the board shake-up still needs to be finalised and agreed by Co-op members.

Mr Sutherland denied trying to rush through changes at the group, telling the BBC he was "committed to take through the reforms at the pace that the democrats wanted".

He has been replaced on an interim basis by chief financial officer Richard Pennycook, who was previously finance director at supermarket chain Morrisons.

Mr Pennycook said yesterday that he would help the group " plot a steady course in the coming months".

Mr Sutherland insisted the group needed to empower executives appointed to the board and marginalise the elected officials, fearing that its regional boards and local area committees benefit far more than the Co-op's five million members and customers.

It has been a fraught past few days for the Co-op after Mr Sutherland's bumper pay deal emerged on Sunday.

Yesterday the group confirmed that he would forgo a £1.5 million bonus and long-term incentive payments due to him for securing the future of the Co-op Bank, which came close to collapse after it was found to have a £1.5 billion hole in its finances.

But he still picked up some £2 million last year after earning more than £1 million in pay and benefits between May and December, as well as a further £1 million in compensation for shares he was due in his previous role as chief operating officer of B&Q owner Kingfisher.

Revelations over the package and guaranteed bonuses caused outrage at the weekend, with the Co-op reportedly set to announce losses of £2 billion later this month, having seen its banking arm fall under the control of bondholders.

The group is facing large-scale job cuts after a disastrous year in which its banking arm needed to be rescued.

It is now facing an overhaul as well as a series of investigations into what went wrong, as well as continuing questions over the appointment of disgraced bank chairman Paul Flowers since he was exposed in a newspaper drugs sting.


From Belfast Telegraph