(Reuters) - Lord Paul Myners has quit the board of Britain’s troubled Co-operative Group Ltd (42TE.L) just a week before the 170-year-old mutually owned-group is scheduled to post a 2 billion pound ($3.35 billion) loss, The Guardian reported late Wednesday.
Myners, who was independent director on the board, had been facing criticism for his proposed restructuring of the board.
Co-operative Group declined to comment to Reuters. (link.reuters.com/sug48v)
Myners, a former government minister, warned in March that the group would run out of capital to support its businesses if a smaller board with the skills to hold executives to account is not constituted.
Myners said the organization needed a chair with no previous connection or involvement with the organization.
He called for the board to be cut down to six to seven independent non-executive directors in charge of all commercial and financial matters instead of the current 20-member elected board, and said no independent societies should sit on it.
The Co-op’s board is elected from regional boards and independent Co-operative Societies, and is entirely non-executive, meaning no director is involved in day-to-day operations.
Euan Sutherland quit as chief executive in March after less than a year in the position, saying it was impossible to reform the company it unless directors adopted a more commercial approach.
Myners’s departure follows that of three directors who were removed from the board for approving a 6.6 million pounds two-year pay packet for Sutherland.
The largest independent co-operative society, the Midcounties, said on Tuesday that it would not support the reform proposals drawn up by Myners.
The Co-op Group, which includes food shops and funeral parlors and a stake in Co-op Bank, has been hit by a succession of scandals. Regulators found a 1.5 billion pound ($2.5 billion) capital hole at its banking arm which eventually led the group to lose control of that business, and the bank’s former chairman was arrested in an investigation into the supply of illegal drugs.
The Co-op’s annual meeting is slated for May 17, at which members would hear details of the group’s strategy review.
($1 = 0.5971 British Pounds)
Reporting by Aashika Jain in Bangalore; Editing by Leslie Adler