Future holds far-reaching reform for disgraced bank

The chairman of The Co-operative Group said the report was a “stark reminder” of the scale of change required in the group’s governance, something to which the group was clearly committed.

She said: “We thank him for his detailed and thorough work. The group board is leading the governance reform process and is putting forward a resolution containing four key principles to our membership next month.

“Sir Christopher’s conclusions must strengthen our collective resolve, underlining as they do the urgency of the need for far-reaching fundamental change. We must ensure the mistakes of the past are never again repeated.”

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Ms Lidbetter also said that the board “awaits with keen interest” the full governance review to be published shortly by Lord Myners, the group’s former non-executive independent director who quit last month after four months having been brought in to fix the beleagured bank.

At the group’s annual general meeting next month, members will vote to decide the scope of reform needed.

There are other reviews into the group still forthcoming, including separate enforcement investigations by the FCA and Prudential Regulatory Authority, both of which will consider the role of former senior managers at the bank.

In January, the Treasury confirmed plans to appoint an independent consultant to review events leading up to June 2013 at the bank, while the Financial Reporting Council has said it is reviewing the audit process undertaken by both the group and its auditors at the time, KPMG.

Meanwhile Niall Booker, chief executive of Co-op Bank since last year, confirmed last week that the bank is considering whether there are grounds to sue former directors and external advisers involved in the Britannia merger deal.

Mr Booker also confirmed the bank had dropped KPMG after 40 years, apppointing Ernst & Young instead.