Co-operative Group chief executive Euan Sutherland has offered his resignation, according to the BBC, and in an attempt to keep him, directors are set to propose a new management board.
In a move apparently described as “back-me-or-sack-me”, Mr Sutherland has offered his resignation to chair Ursula Lidbetter following a number of leaks over the past few weeks.
In the resignation offer, the BBC’s Robert Peston said the Group CEO believes the organisation is “ungovernable”. An emergency board meeting was held for three hours last night, according to the BBC, to convince Mr Sutherland to stay.
In his blog, Robert Peston added that the board has agreed a new “management board” that will run parallel to an elected members board. He said: “The board agreed that a new, more conventional, board would be put in place, that would allow the Co-op to be managed in a more conventional way.
“But that reform has to be agreed by the Co-op’s members and their elected representatives, which is not a certainty.”
He added: “Today the Co-op’s board will tell its regional boards about the proposed new governance structure, that would involve commercial decisions being taken by what would look like a conventional public company board – in other words a board with professional non-executives and two executives.
“The elected Co-op board members would not be on that management board, but would have a new parallel board.”
Over the weekend, the Observer published a leaked paper from the remuneration committee that outlined a doubling of payments for executives on par with plcs. And previously, the BBC’s Robert Peston revealed the Group’s plans to sell the farms business, alongside a potential sale of pharmacy.
In response to the latest leak, Mr Sutherland sent an email to employees and elected members saying he is being undermined by one or more individuals on the board.
He said: “It appears that, once again, the leak has come from our Group boardroom. We seem to have an individual, or individuals, determined to undermine me personally, my team and the rest of the Group board regardless of the uncertainty and disruption this causes to our 90,000 colleagues and our supportive members.”
He added: “We appear to have disaffected people who are determined to make life difficult and embarrassing for the Co-operative at a time when what we need most are professionalism and loyalty to the business.”