The leadership by the then chief executive, Neville Richardson, who left in 2011, is described as a breath of fresh of air. The boardroom review, though, warns that the effectiveness of the board was hampered by its sheer scale – 21 people sat around the table. It also says that board meetings were akin to the United Nations. One director told the review that if you need a microphone (to be heard at meetings) something is wrong. It suggests that changes needed to be made to the board, which comprised six executive members of what was the co-ops financial services team, two members from the group executive team, five elected non-executive members and eight professional non-executives. When questioned about the review, Davies told the committee: Broadly – and this seems somewhat ironic now – the conclusions of Dr Long and the people who reported to her was that the chairman was a very good chairman and was leading the board effectively. During his appearance before the committee, Flowers said he had been through a rigorous process before becoming chairman and was one of four candidates. Baker-Bates, who had stood for the role, said he was told Flowers was selected because he did well in psychometric tests. Last November, Flowers was wrong-footed by the committees chairman, Andrew Tyrie. He said the bank had assets of £3bn. The correct figure was £47bn. According to the review, the boards effectiveness was reduced by its lack of debate and challenge concerning long-term strategy and executive succession. It recommended that the boards agenda be prioritised more effectively and that board meetings be extended. It also highlighted concerns about executives being obverworked. The chief executive raised the problem of management stretch at the board meeting in October 2010 and one director remarked that the executive team is already working very hard and is under significant pressure. Further evidence from Richardson, who became chief executive of the bank after its merger in 2009 with Britannia Building Society before leaving in July 2011, was also published. He said there had been no indication of any losses on loans granted by Britannia – cited by regulators as one of the causes of the banks £1.5bn capital shortfall – at the time he left. He said his departure was precipitated by the refusal of the Co-op Bank to heed my warnings that going ahead with multiple significant and demanding projects simultaneously [including the Lloyds branch takeover] would have disastrous consequences.
Posted on: Tue, 25 Mar 2014 17:04:32 +0000
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