The Co-operative strips its board down to seven members in a bid to recover from £1.5bn capital hole scandal

The Co-operative Group has cut down its board to seven members after agreeing to changes to the way it's governed following a mismanagement scandal that's plagued the group for over a year.

 

Eleven directors have left the firm to create the new “transitional board” of seven members, with two more soon to join – chief executive Richard Pennycook and an as-yet-unnamed chair.

 

The new board is tasked with returning the group to health, after £1.5bn capital hole was discovered in its balance sheet, and the subsequent departures of high-profile executives such as former chief executive Euan Sutherland and chairman Len Wardle. 

 

Sutherland had described the company as being “ungovernable”.

 

In August the group's members agreed to restructuring and governance reforms, with lay members to be replaced by experienced independent directors on a slimmed-down board.

 

The group said in a statement today new rules were registered with the Financial Conduct Authority today.

 

The seven directors on the “transitional board” are chairman Ursula Lidbetter, Marc Bicknell, Duncan Bowdler, Eric Calderwood, Martyn Cheatle, Michael Harriott and Frank Nelson. Pennycook will join later this month followed by one independent professional non-executive director.

 

The business has been beset with problems after it uncovered a £1.5bn capital shortfall last year. Since then, it has been forced to sell off its farming, security and pharmaceutical businesses in order to pay off debts.