Co-op accepts Sutherland resignation
The Co-op has accepted the resignation of the group's chief executive Euan Sutherland with immediate effect.
Sutherland said in a statement that he would not accept the retention payments and long term incentive payments that were previously agreed.
Richard Pennycook, chief financial officer, has been appointed as interim group chief executive.
Sutherland said:
It is with great sadness that I have resigned as chief executive. I have given my all to the business and had hoped to be able to lead its revival.
However, I now feel that until the Group adopts professional and commercial governance it will be impossible to implement what my team and I believe are the necessary changes and reforms to renew the Group and give it a relevant and sustainable future.
Sutherland emphasised the need for fundamental modernisation if the group was to secure the future of its 90,000 workers. Sutherland suggested that cutting the group's substantial debt as well as a revitalised member ship were key to future success.
Ursula Lidbetter, chair of The Co-op, said:
It is with deep regret that I accept Euan's resignation. Last year, Euan and his team saved the The Co-operative Bank, without recourse to the taxpayer, and in doing so rescued the Group from the biggest crisis in its 150-year history.
Having joined Co-op last May, Sutherland announced last month that 2013 has been “perhaps the worst year” in the group’s history, and that it’s “lost its way”.
Speaking on BBC News this morning, City A.M. editor Allister Heath explained that a board as big as Co-op's – which has 21 directors – is just too big for an organisation of that size; it's very easy for sensitive information to be leaked, and things can quickly become dysfunctional.
Heath said of Sutherland: “Clearly, the CEO’s very frustrated…unless there are some major changes, he doesn’t want to be part of it anymore.”
He added that an organisation's got to want to change – it's no good just paying someone a lot of money and hope changes will come about: "If you don’t want to change, trouble lies ahead."
The struggling group, which is currently working through a comprehensive restructuring programme, has seen deep financial issues in its banking arm – facing a £2bn loss – along with the scandal involving ex-chairman Paul Flowers, who was arrested for alleged drug offences.