Co-op needs a calm boss taking home a modest wage
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Wednesday 12 March 2014
Outlook The Co-op board's reaction to Euan Sutherland's resignation should have been simple: "OK. Bye then."
For all his admittedly hard work over the past year, Mr Sutherland has behaved with a petulance and flounce in the past 48 hours that surely made him unsuitable to run this organisation. First, he accepts a £3.6m pay package to run what remains a hugely loss-making organisation. Second, he throws a Facebook fit when outraged board members leak the figure to the media – blaming the leaker for his embarrassment rather than the pay itself. (A Co-op spokeswoman sourly refutes my description of that message as a "flounce", but it certainly looked like one to the outside world.) Third, he resigns while the electronic ink is still not dry on his rant at the "disaffected" board members seeking to undermine him.
Some insiders were telling the BBC yesterday that his resignation was a "back me or sack me" message to the board. It certainly galvanised them into rushing through the sensible boardroom restructuring proposals of Lord Myners.
Judging from the leaks to the Beeb, it looks like some elements in the organisation wanted to go grovelling to Mr Sutherland, begging him to reconsider. This would have been a mistake. He will never recover the backing of the membership for his monster pay packet, and will always be remembered as the man who blamed the whistleblower.
Now that the Co-op has a plan for a workable executive structure, it should not be too difficult to bring in a new chief – with an unflappable temperament and for less money – to lead the movement in its next phase. This should be a conservatively run organisation of level-headed folk with expertise in rescuing badly-run businesses and looking out for the long-term health and prosperity of its members and customers. If it isn't that, it hasn't got a chance.
Richard Pennycook, the stand-in, is well regarded and will be an effective interim (possibly permanent?) boss – but only if he keeps a lid on boardroom pay. The last thing members want to read in a year's time is that he got a giant raise beyond his current £1.8m for stepping into the breach.
As for Mr Sutherland, departing with a likely £1.5m, let him earn his crust behind the closed doors of the private equity world. The Co-op's vulture funds will know some good contacts there.
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