Sir Arthur Sugden

Arthur Sugden, businessman: born Manchester 12 September 1918; accountancy assistant, Co-operative Wholesale Society 1974-80, office manager 1950, factory manager 1954-64, group manager, Edible Oils and Fats Factories 1964-67, controller, Food Division 1967-71, deputy chief executive officer 1971-74, chief executive officer 1974-80; chairman, Co-operative Bank 1974-80; Kt 1978; married 1946 Agnes Grayston (two sons); died Adlington, Cheshire 7 June 2003.

Arthur Sugden was the last business leader of the Co-op at a time when the Co-op was a power in the land. Between 1974 and 1980 he was both chief executive officer of the Co-operative Wholesale Society and chairman of the Co-operative Bank.

At the time CWS was one of the hottest seats in British business, serving as the central federal organisation to a sprawling member-owned movement that accounted for 14 per cent of Britain's grocery trade, delivered one pint of milk in four to the nation's doorsteps and buried one in five of its citizens. For its own account, it owned 150 factories, 35,000 acres of farming land, a bank, an insurance company and a travel chain.

The retail co-operative societies who were the customers of CWS were also its owners, and dominated its board. But effectively CWS had to sell to them rather than buy on their behalf. For their part, the societies engaged in beggar-my-neighbour tactics which made them a sitting-duck target for newer retail rivals.

Born in Manchester, the son of a railwayman, Arthur Sugden took the Co-op's stiff entry exam and joined CWS in 1932 at the age of 14. He gained wider experience during the Second World War; after four months he was selected for officer training and ended as a major. He was able to ally this experience, which included helping in the planning of the Normandy landings, to his knack with numbers (he could add up four columns simultaneously) and subsequent qualification as a certified accountant, and rose through the organisation from accountancy assistant to senior manager.

In 1974, after three years in the deputy role, Sugden was appointed chief executive officer. With the initial support of the board that had selected him, he set about preparing the CWS and the movement it served for the future. But the retailers were underskilled, obstreperous and inefficient - some later proved to be corrupt. It was to take not the six years of his tenure but some 20 years for the retailing and wholesaling to be effectively brought together. By the time of the last major merger - of the CWS with Co-operative Retail Services in 2000 - the retailers' profligacy had turned many solid societies into mere geographical expressions with liabilities. They had failed to heed Sugden's warning that it was necessary to distinguish between genuine progress and "camouflaged deterioration".

Sugden applied his energies in particular to improving profitability and creating the necessary level of reserves, to modern distribution and logistics and to preserving the relatively modest involvement in direct retailing which had been inherited with the CWS's merger with its Scottish counterpart in 1973. He resisted pressure to leave retailing to the co- operative retailers. This small activity was to become the nucleus of the modern CWS, the Co-operative Group.

Above all, Sugden developed the Co-operative Bank. The structure of the bank and the requirement to report to the Bank of England as well as its owner gave Sugden as chairman more freedom of action. In partnership with its brilliant chief executive, Lewis Lee, he set about turning the bank into an innovative force and a model of the co-operative ethic in practice.

The British banking cartel had spent 40 years keeping newcomers out of its clearing system. Sugden mobilised discreet support from Harold Wilson and George Brown, the city gates were opened and the Co-op became a clearing bank in 1975 - the first since 1936. This was sensitively described as "steering it into membership" by the CWS secretary Graham Melmoth, later chief executive; it felt at the time more like an ice-breaker than a cruise ship. The bank expanded its branch network and was an early entrant into credit cards where it was to make its name with the higher socio-economic groups.

Retailers on the board resolved that, after Sugden, the chairmanship of the bank would not again be held by the chief executive of CWS.

Arthur Sugden was quiet, courteous and confident. He had come up the hard way - "the way you cannot envisage unless you have actually done it", according to the journalist Anthony Hilton, then Editor of Accountancy Age. He described the task of CWS in relation to Co-op retailing as "more like pushing string than pulling it".

An exceptional burden in Sugden's last year at CWS was the brutal kidnapping and holding to ransom of his wife, Agnes. The kidnapper threatened to mutilate her if he told the police. Four months later her assailant, defended by the egregious George Carman, pleaded guilty, claiming to have rediscovered God while in prison. He was sent to a psychiatric hospital for treatment rather than being jailed for "a very, very long term indeed", as Mr Justice Russell expressed the alternative possibility. Sugden was impassive during the trial and his wife was courageous beyond belief, then and for their 23 remaining years together.

Sugden's formative years had been in the Army, where he had learned to take nothing for granted, to organise, to receive other people's ideas and "to fire them in the crucible of my own mind". His retirement speech to co-operators made clear the challenge of the future:

Our job is to bring back into human life freedom, spontaneity, creativity, a sense of community and some of the old-fashioned virtues like honesty, integrity and character.

All of these he had in plenty.

Malcolm Hurlston