Co-op Confirms Lord Myners Will Complete Review But Step Down
Co-op Confirms Lord Myners Will Complete Review But Step DownCo-op

The Co-operative Group has confirmed that Lord Myners will complete the review he was appointed to carry out but will step down on 17 May.

Myners, a former government minister, shocked the market by announcing that he is not going to stand for re-election as a senior independent director on the board after only being appointed to lead a major review into the group's governance and structure four months ago.

"We are committed to reforming our governance and know that Lord Myners' report will provide invaluable stimulus for the changes we need to make," said Ursula Lidbetter, chair of the Co-op Group.

"I would like to thank Lord Myners for the work he is doing to ensure the Co-op Group is best placed to reform and, in due course, thrive".

The group also confirmed that the review being undertaken by Lord Myners "is scheduled to be delivered following publication of Sir Christopher Kelly's report into the circumstances that led to the crisis at the Co-op Bank."

Myners announced his surprise resignation only a week before the troubled group is set to post a £2bn (€2.4bn, $3.4bn) loss and only a month after Euan Sutherland quit his role as chief executive.

Last year, the Co-op awarded the former Labour minister a token £1 salary for his work as chairman of the Co-op's internal governance review, where he was meant to scrutinise the ethical organisation's democratic systems and control structures within two phases.

During the first phase, the review focused on primarily on the development of recommendations for strengthening the board structure, composition, working processes and board policies, following the scandal surrounding its former chairman Paul Flowers, that has allegedly been embroiled in taking hard drugs and engaging in paid-for sex orgies.

In Phase 2 of the review, expected to be completed in late 2014, recommendations will be developed for strengthening links with members, as well as with other customers of the group and its employees, in a bid to quell any concerns over the bank's stability, following the £1.5bn capital black hole in its balance sheets.

Co-op's Tale of Woe

The Co-op Bank is one of UK's smallest lenders with 6.5 million customers and a 1.5% share of the current account market.

Last month, the Co-op Bank announced a surprise £400m capital raising plan.

Co-op's Paul Flowers Sex and Drugs Scandal: 'I've Sinned but I Deserved to Be Chairman'
Co-op's Paul Flowers Sex and Drugs Scandal: 'I've Sinned but I Deserved to Be Chairman'BBC Newsnight

On 11 March, Sutherland resigned in a letter after deeming the bank "ungovernable".

Sutherland offered to leave, as the bank tries to overhaul its structure and strategy after near financial collapse and a sex and drugs scandal involving its former chairman Paul Flowers.

Sutherland is thought to be "demoralised and fed-up."

Trouble started in May 2013, after the Co-op Bank's head of banking Barry Tootell resigned after ratings agency Moody's suggested that the British government may have to bailout the lender.

Moody's slashed the bank's debt rating to "junk" status, due to concerns that the lender had a black hole in its balance sheet.

On 22 November, police arrested Flowers as part of an investigation into the supply of illegal drugs. He has since been bailed.

In January 2013, the Co-op unveiled the first set of details surrounding its benchmark internal review.