The Co-operative Group, which owns the former Leek based Britannia Building Society, has announced that their chief executive Euan Sutherland has resigned with immediate effect.
Richard Pennycook, chief financial officer, has been appointed as Interim Group chief executive.
Mr Sutherland said: “It is with great sadness that I have resigned as chief executive. I have given my all to the business and had hoped to be able to lead its revival.
“However, I now feel that until the Group adopts professional and commercial governance it will be impossible to implement what my team and I believe are the necessary changes and reforms to renew the Group and give it a relevant and sustainable future.
“Saving The Co-operative Bank and with it The Co-operative Group from administration was a huge task, but the changes required do not stop there, with fundamental modernisation needed to safeguard the future for our 90,000 colleagues and millions of members.
“The Group must reduce its significant debt and drive major efficiencies and growth in all of its businesses, but to do so also urgently needs fundamental governance reform and a revitalised membership.
“I will not accept the retention payments and long term incentive payments previously agreed for the delivery and protection of value in the Group and the Bank, even though this was successfully delivered.
“I would like to thank all of the Co-op's hard working colleagues for the support they have given me during my time. I wish them all well. The Co-operative has some wonderful people who deserve a great future.”
Karen Bradley, MP for Staffordshire Moorlands, said on hearing the news: “I was surprised to wake up this morning to the news that Euan Sutherland, chief executive of the Co-op Group, had offered his resignation.
“I have not heard from the Co-op, so I do not know why he has resigned. I am not sure if the issues surrounding executive pay have contributed to Mr Sutherland’s decision, but of course if senior management are going to be paid telephone number salaries, they should be working their hardest to earn that money and treating consumers and other employees ethically. I would like to see the Co-op workers in Staffordshire Moorlands share in what I hope will be a recovery of the Co-op from its current difficulties.
“It goes without saying that I want the Co-op to be a stable and successful business, so it’s important that this chaos is brought to an end. The board’s restructuring must be approved quickly by Co-op members so that the changes necessary to secure a long-term future for the group can be carried out. The last thing Co-op workers in the Moorlands need now is more insecurity.”
Ursula Lidbetter, chairman of The Co-operative Group, said: “It is with deep regret that I accept Euan’s resignation. Last year, Euan and his team saved the Co-operative Bank, without recourse to the taxpayer, and in doing so rescued the Group from the biggest crisis in its 150-year history. They have worked night and day to renew the organisation and to give it a sustainable future.
“Euan’s resignation must now act as a catalyst for the real and necessary change which the Group must go through. I would like to thank Euan for his hard work and leadership and to wish him the very best for the future.
“I would also like to thank Richard for stepping up to lead the organisation at this critical juncture. We will start the process to appoint a permanent successor and urgently reform our governance.”
The new Interim Group chief executive Officer, Richard Pennycook, said: “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.”