Whoddunnit? Was it the nurse? Or the retired telecoms engineer? Or the plastering contractor? Or the computer technician? Or the public sector worker?

“With its bizarre cast of disparate characters, The Co-op Group board game is not so much Cluedo as Clueless”

Adam Leyland, Editor

Euan Sutherland must have felt like he was playing Cluedo as he tried to figure out the source of the latest leak from the 21-strong board of directors at The Co-op Group. Yes, the crystal meth-using, rent boy-loving, money-embezzling vicar bank chairman has gone from The Co-op Bank board. But if you haven’t understood quite how dysfunctional The Co-op’s governance still is, the current cast of oddly ill-qualified characters on The Co-op’s board should provide a clue.

In fact, there are clues everywhere you look. Better qualified as they are, why were the CEOs of Scotmid (John Brodie), Midcounties (Ben Reid), Southern (Mark Smith) and Lincolnshire Co-op (Ursula Lidbetter) all on the board, but not Sutherland? Is it any wonder suspicions ran high?

It’s not just the board. The ownership structure is equally unruly. The Co-op is owned by six million members and 80 regional co-ops, represented by 48 area committees, each with 10 to 12 members (so potentially 576 people).

Comparisons are often made with the John Lewis Partnership model. The question is often posed in a self-rhetorical fashion: if JLP can work as a mutual, why can’t the Co-op? But there is night and day between the two in terms of governance. JLP is owned by its 91,000 colleagues. There are five elected members on its main partnership board (out of 15) versus the 15 (out of 21) on the Co-op board. And perhaps most crucially, the JLP board has three non-execs and proper directors from the business, versus one non-exec and no directors from the food and specialist and bank boards. As one of my colleagues said, it’s like The Grocer being run by 15 subscribers and five editors from the William Reed stable of publications. And without me having a say-so in the whole operation.

With another leak on Tuesday (this time about his £3.6m pay packet), Sutherland decided that turning The Co-op around was an “impossible” job and tendered his resignation in a letter (also leaked).

The only problem I have with this, and his declaration that The Co-op is, as he called it “ungovernable”, is that he chose the occasion of a leak surrounding his (ill-judged) pay deal. No one should begrudge a well-qualified and talented leader a fair return on a successful turnaround of the business. But as Sutherland says in the letter, the job is far from done. In calling for fundamental governance reform and a revitalised membership in the week you’ve been embarrassed over your pay packet allows people who are in denial of The Co-op’s crisis to feel vindicated. He should have been prepared to defend his pay packet. Instead, it looks as though, in a fit of pique, he just walked away.

It’s a huge loss to The Co-op, though. And with interim CEO Richard Pennycook ruling himself out of taking on the “poisoned chalice” on a permanent basis, you have to ask two questions: who can save The Co-op? And who would even want the job?

Image credit: Andrew Lynch/Flickr

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