Euan Sutherland on why he quit the Co-op Group

 
Euan Sutherland

I have spoken to Euan Sutherland about why he quit as chief executive of the Co-operative Group.

And he insisted that his resignation had been long considered, even though he had only been in the job for just over ten months.

What tipped him over the edge was the disclosure to the Observer newspaper of his £3m-per-year pay package, but he saw it as just the latest manifestation of a determination by some elected Co-op officials to frustrate his attempt to reform the way the group is run, its governance.

"The senior democrats [as elected Co-op officials are often called] talk the talk of reform, but in practice they won't do it," he told me.

What appears to have annoyed him most was regular leaks of the big strategic moves planned by the group - such as its sale of farms and likely disposal of pharmacies - which he saw as an attempt to foment dissent.

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Mr Sutherland denied that he had been trying to rush through the changes”

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I can't really complain about these leaks, since I was a beneficiary. But I can see it from his point of view.

His hope therefore is that by resigning and highlighting that the group is a long way from mended (it still needs to reassure the banks that it is reducing large debts of £1.5bn, it has promised the Bank of England to inject £260m into Co-op Bank), the change to management structure he believes necessary will now happen.

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

Pride

He had three other things he wanted to get off his chest.

First, he insisted that a quartet of senior executives led by him - including the finance director Richard Pennycook, who has replaced Mr Sutherland temporarily - were "there for the pride of revitalising the Co-op".

He added: "We want it become a campaigning organisation again, especially in communities. And it has to be for more than just the 600 activists, but also for the millions of members and customers".

And here we get to the heart of his critique of the organisational structure of Co-op Group. He is concerned that too much of the benefit of the group goes to those who get elected to the Co-op's regional boards and local area committees, and not enough to the five million members and customers.

"Who is the Co-op for? Is it for the 600 activists, the 90,000 employees or the millions of members and customers?" he asked. "In my view it is for all of them."

His plea, he said, was therefore for the group to implement the reforms to the management structure and governance being prepared by Lord Myners, the former fund manager and erstwhile City minister.

The thrust of those reforms would be to empower the group's executives and - to an extent - marginalise the elected officials.

However, Mr Sutherland denied that he had been trying to rush through the changes. "I was committed to take through the reforms at the pace that the democrats [elected officials] wanted."

But that required some movement by those elected officials. And he increasingly feared that they did not want fundamental change at all.

 
Robert Peston Article written by Robert Peston Robert Peston Economics editor

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  • rate this
    0

    Comment number 133.

    #131. Wiltshire_Lad

    Employees of banks make the mistake of thinking that a Bank Licence is a licence to print money.
    Which of course it is as long as certain provisos are met.
    They concoct positions where they envisage the bank will be in profit in the next period. So enabling them to claim profits - and themselves bonuses.

    The banks meanwhile claim they are too big to fail.
    The taxpayer pays...

  • rate this
    0

    Comment number 132.

    The point really is that the co-operative group for so many years an also ran. Got greedy and tried to grow too fast. The natrual brake of the governers was missing due to the obvious need to modernise or fall by the wayside. The past leadership has been appaling what is needed is truth, openess and transparancy to galvanise the people who can get us out of this mess.

  • rate this
    0

    Comment number 131.

    130.prudeboy

    no, I don't agree, any more than I subscribe to the fantasy of people receiving bonuses for failing. If you were in charge of distributing bonuses would you award them to people who had failed, bearing in mind that your own bonus depended on their results?
    We have no facts to go on, just a total pool and a number of people, so it is all speculation, often fed by jealousy.

  • rate this
    0

    Comment number 130.

    #129. Wiltshire_Lad

    There is no imagined conspiracy. Only business as usual. Bankers getting getting bonuses whilst the company they work for make continued losses.
    No conspiracy at all.
    I am at a loss to find a logical explanation.
    Do you have one?
    Apart from "If it can be taken then why not.".

    I still reckon they are fools fallen in with thieves.

    Just like the rest of us.

    Obviously not you..

  • rate this
    0

    Comment number 129.

    128.prudeboy

    Your view is blinkered by your fixation with an imagined conspiracy to steal the Co-op's assets (if any). I would expect the structure to make the assets safer. Do they own the premises of the stores or are they on expensive leases? The goodwill must be nil.
    Even the fans of the Co-op (clearly not including me) keep saying that it been badly managed. Difficult to see a happy end.

 

Comments 5 of 133

 

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