Paul Myners left Co-op after board accused him of damaging brand

http://www.theguardian.com/business/2014/apr/13/myners-left-co-op-accused-damaging-brand

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Lord Myners dramatically quit the Co-operative Group's board after being accused by a board member of damaging sales by talking down the mutual's brand, the Observer has learned.

The former Labour City minister quit just four months after being brought in to reform the troubled chain of supermarkets, funeral homes and pharmacies. The dispute centred on an interview Myners gave to the Guardian in which he claimed that the Co-op's reputation as a business run by its members was a myth.

He went on to tell the paper that the company's most senior managers were left to waste billions of pounds on disastrous corporate transactions because the directors drawn from the Co-op movement were not qualified to keep them in check. "Few of them have any serious business experience and many are drawing material financial benefits from their positions," he said.

The unnamed board member told Myners, in front of others at a board meeting on Wednesday, that revenue from the sale of goods had been hit by Myners's attack. A source said: "That intervention appears to be what led Myners to suddenly quit the board." It is understood that Myners had also caused ill-will among the regional boards, whose support was crucial to push through his vision of reform.

A source said there had been considerable upset that Myners had not visited any of the regional boards, or joined conference calls that his own office had organised for the regional boards to discuss his own proposals, which included tearing up the existing boardroom structure and replacing it with a plc-style model.

Myners, who was chairman of the Guardian Media Group until 2008, when he joined the Labour government at the height of the financial crisis, was brought in with a mandate to draw up a blueprint for a new-look Co-op that will be put to its members in June.

His resignation came hours after members of the Co-op voted to remove the three directors who approved the controversial £6.6m pay packet for the chief executive, Euan Sutherland, who quit last month after that deal was leaked to the Observer.

Meg Hillier MP said in parliament last week that two other executives at the Co-op were on unjustifiable remuneration packages. "Alistair Asher, who is now the Co-operative Group's general counsel, was formerly a partner at Allen & Overy, where he was involved with building society demutualisation. He may have worked on demutualisations in the past, but the Co-op does not want to demutualise.

"Another member of the team is Nick Folland, the director who deals with communications," she said. "Both those men have been given a retention package of more than £1m this year and next year that is not performance-related. I repeat that such gross, over-inflated handouts must stop."

A Co-op spokesman said he could not confirm or deny that Myners had been challenged over a fall in revenues.