Co-op appoints one of its harshest critics as a director in bid to leave disastrous past behind

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The author of a report which sharply criticised the Co-operative over the near-collapse of its banking arm has been appointed to the group’s board.

Sir Christopher Kelly said the group had badly let down its members by its failure to provide “proper stewardship” to the lender, which was dragged down by its disastrous merger with the Britannia building society.

Now the ex-Treasury mandarin has been named senior non-independent director of the group, the first external appointment under radical governance reforms in the wake of the debacle.

Sir Christopher will help recruit members for an entirely new board which will be in operation from next May.

Group chair Ursula Lidbetter said: “Sir Christopher’s recent report into The Co-operative Bank was detailed and incisive and was instrumental in helping us move on by learning from the mistakes of the past. His deep experience of finance, public policy and governance mean he is ideally suited to the new role of senior independent non-executive director.”

The group also named Simon Burke as independent non-independent director. He holds a similar role at the BBC and has previously been non-executive director of Co-operative Food.

The smaller board marks a radical change from the way the Co-op was previously run by elected directors, including a plasterer and retired deputy head teacher, but will now mostly consist of professional business people.

Reforms were approved by the group’s membership following a coruscating report by former City Minister Lord Myners who said it was apparent that none of the board could handle the complex issues faced by the debt-laden and crisis-hit business.

Sir Christopher’s report had also been scathing about the group directors.

He said: “I have no doubt at all that the methods used over the last few years to appoint members to the board of the Co-operative group and its subsidiaries have led to serious failures in relation to oversight and governance of the bank.”

The group suffered the worst crisis in its 150-year history last year as it notched up a staggering £2.5bn annual loss after being dragged down by the near-collapse of the bank. It now owns just 20 per cent of the lender