Crisis at Co-op: The debacle over Euan Sutherland’s pay only confirms that he was not the right person to be running the mutual

The fundamental point about the mutual is that it is not any other major corporation; it is a historic organisation that was founded for the benefit of its members

Share

Sad to say, Euan Sutherland’s resignation as Co-operative Group chief executive can only be welcomed. The mutual’s board was at first anxious that he should stay and had agreed to restructure the group so that Mr Sutherland – who used to run the Kingfisher subsidiary B&Q – could manage it along more conventional lines. But in the event they decided he should go and that the required changes will be made by his successor.

The immediate backdrop to all this was, of course, the recent revelation that Sutherland was due to be paid £3.6m this year – comprising £1.5m in salary, a £1.5m retention payment, and cash to buy him out of his Kingfisher incentive schemes. Furthermore, under new remuneration proposals that were designed to mirror rewards at similarly-sized UK quoted companies, the other eight senior executives would also receive a combined £12m, or twice what the previous Co-op bosses earned.

There is something deeply wrong here, and deeply wrong with the comparison with Co-op’s corporate peers. The fundamental point about the mutual is that it is not any other major corporation; it is a historic organisation that was founded for the benefit of its members. Not to appreciate this, to feel instead that the Co-op should copy the Kingfishers of this world, is to fail to understand the institution’s roots, its purpose as a movement, and its fierce attachment to high ethical values.

Of late, the crisis at Co-op Bank – its abortive plan to buy 632 Lloyds Bank branches, and the disclosure of alleged drug taking by its chairman, the Reverend Paul Flowers – means that reputation has taken a considerable beating. Mr Sutherland, who joined last May, had described the past 12 months as “perhaps the worst year” in the Co-op’s history, one in which it became clear the organisation had “lost its way”. He also said that under its present structure it was “ungovernable”. Just how difficult the task the new CEO faces will be confirmed again, when annual losses of £2bn are reported later this month.

Mr Sutherland’s appointment was hailed as an opportunity to right those wrongs. That does not mean, however, abandoning cherished principles and adopting the standard, PLC approach. That Mr Sutherland did not appear to appreciate that became a cause for concern. Hardly less alarming was his chosen method of defending his pay, on Facebook. Rather than set out a detailed exposition as to why he was worth such sums, he chose instead to shoot the messenger, the individual or individuals on the Co-op board who leaked his remuneration details. Not only did such an approach not augur well for boardroom harmony, it both failed to address the central issue and was also more broadly ill-judged: chief executives of major institutions do not air their dirty linen on Facebook.

The only conclusion from this whole sorry episode was that Mr Sutherland was not the right man for the job, that he was struggling with a rambling, unwieldy body from which he was emotionally and intellectually detached. It would have been far better for Mr Sutherland to receive the same pay as his opposite number at John Lewis, the nearest the Co-op has to a peer. But then £1.3m was far short of £3.6m. The board must not make the same mistake twice.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Recruitment Genius: National Account Manager / Key Account Sales

£30000 - £35000 per annum: Recruitment Genius: An opportunity has arisen for a...

Recruitment Genius: Operations Manager

£30000 - £35000 per annum: Recruitment Genius: An exciting opportunity to join...

Recruitment Genius: Recruitment Consultant

£30000 - £35000 per annum: Recruitment Genius: We have an excellent role for a...

Recruitment Genius: IT Support Analyst - Bristol

Negotiable: Recruitment Genius: An IT Support Analyst is required to join the ...

Day In a Page

Read Next
 

Britain, we have a drink problem

Stefano Hatfield
 

In Sickness and in Health: Cheers Jacko, the kindness of strangers is a great tonic

Rebecca Armstrong
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'
Marian Keyes: The author on her pre-approved Christmas, true love's parking implications and living in the moment

Marian Keyes

The author on her pre-approved Christmas, true love's parking implications and living in the moment
Bill Granger recipes: Our chef creates an Italian-inspired fish feast for Christmas Eve

Bill Granger's Christmas Eve fish feast

Bill's Italian friends introduced him to the Roman Catholic custom of a lavish fish supper on Christmas Eve. Here, he gives the tradition his own spin…
Liverpool vs Arsenal: Brendan Rodgers is fighting for his reputation

Rodgers fights for his reputation

Liverpool manager tries to stay on his feet despite waves of criticism
Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

Amir Khan attacks the Taliban

'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
Michael Calvin: Sepp Blatter is my man of the year in sport. Bring on 2015, quick

Michael Calvin's Last Word

Sepp Blatter is my man of the year in sport. Bring on 2015, quick