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: Lettings and Sales Negotiator - OTE £46,000

£16000 - £46000 per annum: Recruitment Genius: This is an opportunity to join ...

Recruitment Genius: Home Care Worker - Reading and Surrounding Areas

£9 - £13 per hour: Recruitment Genius: This is a great opportunity to join a s...

Recruitment Genius: Key Sales Account Manager - OTE £35,000

£25000 - £35000 per annum: Recruitment Genius: Have you got a proven track rec...

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Day In a Page

Read Next
David Cameron visiting a primary school last year  

The only choice in schools is between the one you want and the ones you don’t

Jane Merrick
Zoë Ball says having her two children was the best thing ever to happen to her  

Start a family – you’ll never have to go out again

John Mullin
Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn