The man who declared the Co-operative Group’s £1.5bn capital shortfall in the Co-operative Bank a failure in management and governance has joined the society’s board.
Sir Christopher Kelly, who completed an independent review of the Group’s problems earlier this year, has been appointed senior independent non-executive director. This post was first held by Lord Myners, who completed a separate inquiry into the state of governance at the Group.
In April, Sir Christopher’s report said that poor commercial lending, a failed IT project, and mis-selling of PPI accounted for the bulk of the capital shortfall. “But the severity of the problem,” he said, “was magnified by failures of management, lack of capability, a fallible culture and weak governance.”
He also said there was a “flawed culture” and a system of governance which led to serious failures of oversight.
Sir Christopher will be assisting in the recruitment of a new baord, which is set to be operational by May.
Prior to the review into the Co-operative Bank, Sir Christopher was a senior public servant for many years and brings to this new role extensive experience including financial and public policy. He currently chairs the King’s Fund and the Responsible Gambling Strategy Board and previously chaired the Committee on Standards in Public Life, the Financial Ombudsman Service and the NSPCC.
At the same time, Simon Burke has been made an independent non-executive on the transitional board, until May. He held the same role on the Co-operative Food’s subsidiary board and is also a director with the BBC and was formerly chair of BathStore and Hobbycraft.
Group chair Ursula Lidbetter said: “We are delighted to be able to strengthen our board with the appointment of Sir Christopher Kelly and Simon Burke as independent non-executive directors, both of whom have already made significant contributions to the Co-operative Group and fully understand the challenges and opportunities we face.”
As well as Ms Lidbetter, the Group’s board comprises: Duncan Bowdler, Michael Harriott, Frank Nelson, Eric Calderwood, Martyn Cheatle, Marc Bicknell and chief executive Richard Pennycook.