UPDATE: UK: Co-op confirms exit of CEO Sutherland
Co-op must establish "professional governance" - exiting CEO Sutherland
The Co-operative Group this afternoon (11 March) confirmed CEO Euan Sutherland would leave the UK's fifth-largest grocer with immediate effect after the company accepted his resignation.
In a statement, the Co-op said CFO Richard Pennycook had been appointed interim chief executive after Sutherland quit under a year after he took the job.
Sutherland reportedly offered his resignation yesterday after details of his pay package were leaked.
The BBC said this morning The Co-op's board had met last night to try to change Sutherland's mind but his departure was announced just before 13:30 GMT.
"It is with great sadness that I have resigned as chief executive," Sutherland said. "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."
Ursula Lidbetter, the Co-op's chairman, said Sutherland's resignation must act as a "catalyst for real and necessary change" at the company.
Lidbetter expressed "deep regret" at Sutherland's departure and credited the chief executive with "saving" The Co-operative Bank from collapse last year.
"Euan and his team saved the 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," Lidbetter said.
The Co-op has faced numerous challenges in recent years - from the GBP1.5bn hole in the banking arm's balance sheet to declining sales and market share at the firm's food retail arm. Sutherland joined the mutual society in May from B&Q owner Kingfisher with the mandate of turning the firm's fortunes around.
In his statement, Sutherland said preventing The Co-operative Bank from falling into administration has been a "huge task" but insisted that "the changes required do not stop there". The Co-operative is in need of "fundamental modernisation", he argued.
He added: "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."
Sutherland said he is not accepting retention or long-term incentive payments previously agreed in association with the rescue of the bank.
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