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 The group, Britain's largest mutual society, said Len Wardle
resigned because of his involvement in the appointment of Paul Flowers, who was
caught in a Mail on Sunday video allegedly buying crystal meth, cocaine and
ketamine. Co-op has launched an investigation and pledged to examine the way it
makes appointments at the bank.
"I have already made it clear that I believe the time is right for real change
in our operations and our governance," Wardle said in a statement.
The pressure has been building for weeks at Co-op, which has reshaped its
leadership in the wake of troubles that emerged following its 2009 acquisition
of the Britannia Building society and its aborted interest in the purchase of
some 630 branches from another U.K. lender, Lloyds Bank.
The bank has had to plug a 1.5 billion pounds ($2.4 billion) black hole in its
finances and recently agreed to a rescue plan that saw hedge funds move in and
take a huge share of the bank's operations.
Though the group, which also runs grocery stores, pharmacies and funeral
parlors, will remain the largest single shareholder with a 30 percent stake in
the bank, it was forced to take out full page advertisements in British
newspapers to underscore its commitment to retaining its values.
The Mail on Sunday reported that Flowers, a Methodist minister, bought the drugs
just days after a parliamentary committee grilled him on the bank's disastrous
financial performance.
That committee session was memorable because Flowers, who quit as chairman after
a little over three years as chairman in June, failed to answer very basic
questions about his own bank. Flowers told Treasury Select Committee chair
Andrew Tyrie that Co-op's total assets were about 3 billion pounds ($4.83
billion) — they actually total about 47 billion ($75.7 billion).
At a time when the financial crisis already saw the public questioning the
ethics of bankers, the testimony raised questions over their competence. Now
critics are wondering whether regulators were doing enough to supervise — and
monitor — a bank's most senior leaders and decision makers.
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"This latest episode over the chairmanship of the Co-op illustrates
how much there is to do to reform the regulatory approval process
for bankers, especially those at the top of our banks, and how
important it is that fundamental reform take place," Tyrie said in a
statement.
Unlike people who manage investments, for example, there's no set
qualification for a chairman. Knowledge of an organization and how
it works is among the critical factors authorities examine, but many
organizations seek out a board with a diversity of backgrounds and
experience making any single test difficult to administer.
Flowers apologized for his behavior and said personal and profession
pressures led him to do things "that were stupid and wrong."
West Yorkshire police are making inquiries and Flowers' problems
continue to mount.
Bradford council said Flowers resigned as a councillor in 2011 after
"inappropriate but not illegal adult content" was found on a
computer he used.
The opposition Labour Party has suspended Flowers as did his church.
[Associated
Press; DANICA KIRKA]
Copyright 2013 The Associated
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