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| Ex-City minister Lord Myners quits Co-op Group board | Ex-City minister Lord Myners quits Co-op Group board |
| (35 minutes later) | |
| Former City minister Lord Myners has quit the board of the troubled Co-operative Group, amid criticism of his plans to reform the business. | Former City minister Lord Myners has quit the board of the troubled Co-operative Group, amid criticism of his plans to reform the business. |
| His departure is another significant blow for the business, which is facing losses of up to £2bn. | |
| The largest of the group's independent societies has opposed his proposals, aimed at making the Co-op's governance more like a publicly listed company. | |
| But the Co-op says Lord Myners' review will continue, despite his resignation. | |
| The group's chief executive, Euan Sutherland, resigned last month after he described the business as "ungovernable". | |
| 'Democratic deficit' | |
| Lord Myners' initial findings accused the Co-op of suffering from a significant "democratic deficit", in which ordinary members have surprisingly weak constitutional rights and a limited ability to influence the group's activities. | |
| He also found the group's three-tier system of elected member representation had "consistently produced governors without the necessary qualifications and experience to provide effective board leadership". | |
| Instead, he proposed bringing in outside directors and giving the Co-op some of the checks and balances more common to a publicly listed company. | |
| But some of the Co-op's most influential members are worried the changes would damage the group's values. | |
| Its largest independent society, Midcounties, which along with about a dozen others accounts for 20% of board votes, has already said it will oppose Lord Myners' plans. | |
| Bank troubles | |
| Lord Myners was appointed as a senior independent director by Co-op Group chair Ursula Lidbetter in December, to undertake a full review of the entire business. | |
| It followed the collapse last year of Co-op Bank's deal to take over 632 Lloyds Bank branches and the arrest of the bank's chairman Reverend Paul Flowers on drugs allegations. | |
| Its banking arm alone is preparing to announce a loss of about £1.3bn for 2013. | |
| In November last year, it announced that a group of private investors, made up mostly of hedge funds, would inject nearly £1bn into the bank in exchange for a 70% ownership stake. | |
| Last month it announced plans to raise another £400m by issuing new shares, following the discovery of additional costs related to past misconduct and poor documentation. |