Problems can be fixed but need tough decisions at top, say experts

Dr Iain Clacher, who is an associate professor in accounting and finance at Leeds University Business School, said that chief executive Euan Sutherland’s resignation had not been foreseeable.

He added: “However, the problems are around getting things done in a co-operative, as opposed to a plc, are very clear.

“The fact that he (Mr Sutherland) has a plc background means that it was inevitable that there would be problems with changing culture.

“The Co-operative Bank is losing its co-operative credentials, given the large stakes that hedge funds have, relative to the Co-operative Group.

“The bank launched an ethical policy the same day as it announced 1,000 redundancies, and this goes against the long-standing ethos of the co-operative.

“Resistance to change was foreseeable, as is future resistance. Other things, like over-extending the business with the merger with Britannia (Building Society) are easy to spot in 
retrospect, but much harder to do at the time, even with due diligence.

“It needs someone who can come in and manage the process, and straddle the cultural gap between the plc and co-operative.”

Labour and Co-operative Party MP Meg Hillier criticised Mr Sutherland’s actions, telling BBC Radio 4’s Today programme yesterday: “Obviously he has got a timetable and things have to be done, but he is jumping the gun and completely ignoring the mutual ethos of the Co-operative Group.”