The Co-operative was thrown back into crisis yesterday after its chief executive quit the “ungovernable” group in the wake of a meltdown in boardroom relations.
The mutual accepted Euan Sutherland’s resignation after he used an extraordinary Facebook rant to blame “an individual, or individuals” at the top of the group for seeking to undermine him by revealing details of his £3.66m pay deal to a newspaper.
He has been replaced by chief financial officer Richard Pennycook, who will act as interim chief executive. He was previously finance director at Bradford-based supermarket chain Morrisons.
Mr Sutherland’s departure after less than a year at the helm leaves the Co-op without a permanent boss and facing the biggest governance overhaul in its history. In an emergency call following Mr Sutherland’s resignation, the board agreed to be abolished in favour of a new “plc’’-style board including only executive and non-executive directors, responsible for taking commercial decisions. The shake-up still needs to be finalised and agreed by Co-op members.
A source confirmed Mr Sutherland claimed in his letter of resignation to group chairman Ursula Lidbetter that the business had become “ungovernable’’.
He said yesterday that his decision was made after efforts to overhaul the business had been made “impossible” by the mutual’s failure of governance.
But it is not thought he offered a “back-me-or-sack-me” ultimatum, with his resignation on Monday his final decision.
The Co-op confirmed he will forgo a £1.5m bonus and long-term incentive payments due to him for securing the future of the Co-op Bank, which came close to collapse after it was found to have a £1.5bn hole in its finances.