CO-OP Group chairman Len Wardle yesterday resigned ahead of schedule in the wake of the drugs scandal surrounding former Co-op Bank chair Reverend Paul Flowers, who he helped appoint.
Flowers quit the bank in the summer when the lender’s £1.5bn capital hole became evident, and was this week revealed to have taken drugs including crystal meth and crack cocaine.
Deputy chairman Ursula Lidbetter has now taken the top job and will lead a review into the governance structure.
The 160-year old mutual has a democratic structure, where members vote for board directors to oversee executives.
But the group now fears the system is outdated – Reverend Flowers was appointed despite being a Methodist minister with just four years banking experience acquired 40 years ago.
“These are very difficult times for the Co-operative Group and the wider movement, but I believe that we can and will come through this period stronger than ever by facing up to our challenges,” Lidbetter said.
“I look forward to working with my fellow board members and the wider membership as we change the way we are organised and governed in the interests of all our 7m members.”
The group has appointed more professional non-executives to its bank’s board, but is only now considering the options for its group board.
That board is usually 20-strong and elected by members and from affiliated co-operatives from around the country.
It includes a range of directors from Co-operative lifers like Lidbetter who joined as a graduate recruit, through professions such as accountancy, farming and plastering – a setup which has been criticised for failing to provide oversight, particularly at the bank.
Wardle had expected to leave next May, but the revelations around Flowers have seen him leave early.
“The recent revelations about the behaviour of Paul Flowers have raised a number of serious questions for both the bank and the group,” Wardle said yesterday. “I led the board that appointed Paul Flowers to lead the bank board and under those circumstances I feel that it is right that I step down now.”