The Co-operative Bank's disgraced former chairman, Paul Flowers, apparently won the job because he beat his rivals' psychometric test scores, MPs on the Treasury Committee have been told.
The Methodist minister left the Co-op at the centre of a storm after being filmed allegedly buying drugs.
Asked by MPs if he knew why Mr Flowers had beaten him to the job, Rodney Baker-Bates, a banker of many years standing, said: “I was told afterwards he did very well on the psychometric tests.”
Mr Baker-Bates was made deputy chairman along with former Prudential executive David Davies to support Mr Flowers, who had almost no banking experience.
Both men were fiercely opposed to the disastrous attempt to merge with Lloyds' 600-branch strong Verde business and resigned as a result.
Mr Baker-Bates said he believed Co-op would have remained in its current form had he got the job. Regulators' discovery of a huge black hole in its finances forced a rescue that resulted in the bank falling to hedge funds that owned its debt.
He said his own interview for the job didn't even cover banking: “My interview focused on my knowledge of the Co-operative Group and Movement. I don't remember much discussion of my banking experienced. No references were asked for. There was an announcement the following day.”
Mr Davies said: “I have to say the psychometric testing did surprise me. Paul was a clear winner. When I looked at the scores I was concerned about a couple.”
Andrew Tyrie, the committee's chairman, said after the hearing: “The Co-op Group board was the driving force behind the Verde negotiations, not the Co-op Bank.
“The two deputy-chairmen of the Co-op Bank, appointed to guide a chairman with little knowledge of finance, resigned because of their opposition to Verde. Instead of ignoring their advice, alarm bells should have sounded on the main Co-op Group board.”
Philip Corr, a psychology professor at City University in London, said “Psychometric testing can be very effective when used as part of a wider set of selection tools, including assessment of specific professional competencies.”
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