Co-op in crisis – uncertainty over Sutherland’s future
THE Co-operative Group is this morning in state of crisis, with uncertainty over the future of chief executive Euan Sutherland, who resigned last night on a “point of principle”, a company source said.
Mr Sutherland, aleady enraged over a leaks by a ‘fifth column’ within the organisation regarding his, and other executives’ pay awards, tendered his resignation at a tense board meeting on Monday night on the grounds that the organisation is “ungovernable”.
The former Kingfisher executive, who has been with the Co-operative since last May, is said to want the organisation to adopt a flatter structure, making governance easier. His plan is for the current 20-strong board to be disbanded and replaced by two differing structures – one to represent members’ interests – and the other would be like a plc board.
Facing opposition from within the Manchester-headquarted organisation, Mr Sutherland took a high risk gamble by threatening to resign.
Leaks to the media, and the BBC this morning, have further complicated the situation, and it remains to be seen whether Mr Sutheland will return to his job, even if his reforms are accepted by the board. It is understood efforts are being made to persuade him to change his mind, amid fears of who would want to take on the role with the organisation in such a mess.
One source said: “At the moment Euan’s resignation stands. The group is in a state of flux but the situation should become clearer over the next 24 hours.”
A formal statement from the group is expected later.
Today’s revelations comes after a turbulent year for the group, which saw its bank nearly collapse.
Annual losses of £2bn are expected to be announced later this month, while the group has put its farms and pharmacies divisions up for sale to raise funds for other parts of the business.
Meg Hillier, the Labour and Co-operative MP, accused Mr Sutherland of “throwing the toys out of the pram” in a radio interview.
“He’s got a timetable of things that have to be done but he’s jumping the gun and completely ignoring the mutual ethos of the Co-operative Group,” she told BBC Radio 4. “Strong leadership in a mutual model does not mean throwing a fit and throwing the toys out of the pram when something like your salary is leaked.”
On Sunday, Mr Sutherland slammed “disaffected people who are determined to make life difficult and embarrassing for The Co-operative” following the revelations about executive pay.
