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Your support makes all the difference.Lord Myners has launched an excoriating attack on the way the Co-operative Group’s board works and in particular its non-executive directors, “few of whom have any serious business experience”.
Myners, the City grandee who was brought in at the end of last year to shake up the Co-op’s governance, appeared clearly to back former chief executive Euan Sutherland, who resigned this week, describing the company as ungovernable.
The Co-op has been battered by a series of crises including the £1.5 billion black hole at its bank, drug allegations over the bank’s chairman Paul Flowers and Sutherland’s angry departure. It is expected to announce losses of more than £2 billion next month along with potentially thousands of job cuts.
Myners said the Co-op should not appoint a new chief executive until major reforms to the board had taken place. He said: “While these governance issues remain unresolved the Co-operative Group will be unable to attract applications from best-in-class retail executives.”
Myners has brought out an interim report ahead of his full report, which he plans to complete in April.
He said: “I am deeply troubled by the disdain and lack of respect for the executive team that I have witnessed from some members of the group board. There is a phrase frequently used in Co-operative Group circles that the executive should be ‘on tap but not on top’.
"It is now clear to me that this is a widely held but deeply flawed representation of the reality in recent years. Elected directors have simply not been up to their task of holding the executive to account.”
Myners continued: “The Co-operative Group suffers from acute systemic weaknesses in its governance framework that over many years have gravely damaged the organisation.”
He accused the board of spending far too much time on deals, like the takeover of Somerfield and the merger of the bank with Britannia Building Society, rather than focusing on improving the performance of the business.
Myners said he would recommend creating a new board under an independent chairman with no previous involvement with the Co-op, seven independent non-executive directors and two executive directors. The non-executives should have the skills and experience of those who sit on public supermarket companies’ boards.
He recommended a 100-strong National Membership Council elected on a one-member, one-vote basis and including around 20 employees. This body would guard Co-operative values and hold the group board to account.
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