RICHARD Pennycook, the former finance chief at Bradford-based supermarket chain Morrisons, has been given the job of re-building confidence in the Co-operative Group, following the shock resignation of chief executive Euan Sutherland.
Mr Pennycook joined the group last year after nearly eight years as group finance director at Morrisons. He has also been group finance director at the RAC and JD Wetherspoon.
Yesterday, Mr Pennycook, who was the Co-op’s chief financial officer, became the group’s interim chief executive.
Mr Pennycook said yesterday: “Our businesses continue to perform in line with the clear commercial plans put in place under Euan’s leadership and I and the team will plot a steady course in the coming months.”
Mr Sutherland’s resignation follows his comments on the group’s social network Facebook at the weekend that accused unidentified board members of seeking to undermine him by leaking details of his £3.7m pay package – more than double his predecessor – to the media.
The public row between Mr Sutherland and members of the board resisting his efforts to turn the group into a more conventionally run business, such as the retailer Tesco, marks a major turning point in its 170-year history.
The former boss of Kingfisher’s home improvement chain B&Q has described 2013 as the worst year for the group, after it was rocked by the discovery of a £1.5bn capital hole in its banking arm and a drugs scandal involving the unit’s ex-chairman, Methodist minister Paul Flowers, who had little banking experience.
“We appear to have disaffected people who are determined to make life difficult and embarrassing for The Co-operative,” Mr Sutherland told employees on Facebook.
Britain’s biggest mutual is owned by its 7.2 million members.
Its board is entirely non-executive, and is elected from regional boards and independent Co-operative Societies.
“I don’t think this will break the group but it certainly shows that attempts to reform it into a more mainstream business are going to be difficult if not impossible,” Andre Spicer at the Cass Business School said.
“It’s also going to be a very, very tough position to attract someone of a similar kind of stature.”
Mr Sutherland, a Scot who trained at Coca Cola, and who has almost two decades of retail experience, was due to announce changes to his executive team on March 17 ahead of the group’s full-year results on March 26.
The Co-op is selling assets such as its farming business and is expected to report a record loss of over £2bn stemming from its banking unit.
The group had promoted itself as a more ethical alternative to the country’s banks and big business.
But Mr Spicer said the group’s reputation for being a more ethical outlet was dissolving fast, with life-long members closing their accounts in the wake of the banking scandal.
The Co-operative Group has strong historic links with Yorkshire, where it employs around 7,600 people.