The Financial Conduct Authority (FCA) has banned Paul Flowers from the financial services industry.
Mr Flowers was chair of Co-operative Bank between 15 April 2010 and 5 June 2013, when the organisation was 100% owned by the Co-op Group. The bank was formed in 1872 as the Loan and Deposit Department of the Co-operative Wholesale Society. The Group offloaded its final share in the bank in June 2017.
The former chair came under investigation after failings in management and governance led to the capital shortfall of £1.5bn in the Co-operative Bank. The FCA found that Mr Flowers’ conduct “demonstrated a lack of fitness and propriety required to work in financial services”.
“The role of chair occupies a unique place of trust and influence,” said Mark Steward, FCA executive director of enforcement and market oversight.
“The chair is pivotal in setting expectations of a company’s culture, values and behaviours.
“Mr Flowers failed in his duty to lead by example and to meet the high standards of integrity and probity demanded by the role. These high standards are what the financial services industry and the wider community rightly expect of its senior individuals. Where a chair, or other senior individual, fails to discharge these standards the FCA will hold them to account.”
In a statement, the FCA said Mr Flowers had “demonstrated an unwillingness to comply not only with the FCA’s requirements and standards but also with other legal, regulatory and professional requirements”.
“The FCA believes Mr Flowers’ disregard for the standards he is expected to meet demonstrates a lack of integrity and that any future involvement by Mr Flowers in the financial services industry risks undermining consumer and market confidence,” added the statement.
The FCA found that Mr Flowers, who was also removed from the Methodist roll of ministers last year, behaved in a manner that breached Co-op Group and Co-operative Bank policies. In addition, after stepping down as chair, Mr Flowers was convicted for possession of illegal drugs.