Co-op Group chief executive resigns

<p>Euan Sutherland announced he was stepping down from the role.</p>

The Co-operative Group has announced that chief financial officer Richard Pennycook will take over as interim chief executive following the resignation of Euan Sutherland.

Mr Sutherland announced yesterday (March 11th) that he was stepping down from the role because he does not agree with the way the company is being governed.

The Co-Operative Group, unlike most organisations, is run for the benefit of its members, rather than its shareholders. But Mr Sutherland argued that decisions are being made that instead considered the impact on elected officials.

In a statement, he stated that he resigned with "great sadness" and revealed that he will "not accept" the retention and bonus payments that had previously been agreed with his employers.

Co-op chairwoman Ursula Lidbetter added she accepted the resignation of Mr Sutherland with "deep regret" as she confirmed Mr Pennycook will temporarily step up to the chief executive role.

She said: "Euan's resignation must now act as a catalyst for the real and necessary change which the group must go through."

Planned reforms

Mr Sutherland was in his position for less than a year but stated he was not able to push through the reforms he wanted to implement at the top of the organisation.

He said: "We appear to have disaffected people who are determined to make life difficult and embarrassing for the Co-operative at a time when what we need most are professionalism and loyalty to the business."

Lord Levene, who led a rival bid for Lloyds TSB branches in competition with the Co-op Bank, told the BBC that this resignation is the latest stage in a "never ending" series of issues for the firm. "They got in a good professional to run the place, and it seems he looked, and decided it wasn't for him," he said.

Mr Pennycook, who takes over from Mr Sutherland as chief executive with immediate effect, added that businesses will "continue to perform in line with the clear commercial plans put in place under Euan's leadership". He added: "I and the team will plot a steady course in the coming months."

Co-op Group operates 4,500 retail outlets and employs almost 90,000 people.

Find up to date information on the FTSE 100 and spread betting strategies at City Index

Build your confidence risk free
Join our live webinars for the latest analysis and trading ideas. Register now

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.