Many organisations across the capital taking advantage of business support solutions are likely to have followed with interest the recent scandal surrounding the Co-op and the drug use and incompetency of former bank boss Paul Flowers. In so doing, some will have wondered whether the Group’s appointment of a non-executive director to chair a Governance Review will do much to restore its reputation.
The Group has appointed Lord Paul Myners as a non-executive director (NED) with immediate effect, his title being Senior Independent Director. His responsibility will be to examine the Group’s democracy and consider the manner of the board’s constitution and chairmanship. For many customers of business support solutions, even an appointment such as this can be seen as too little, too late, although in this instance, the Group has appointed a high calibre candidate who is likely to bring a sense of resolution to the crisis.
Those were certainly the thoughts of MHP Communications Managing Director Barnaby Fry, who has said that “strong leadership and a resolve to effect considerable change in the process and ethics of the business is essential. This is the opportunity for the Co-op to lead on the front foot and prove it’s a business with credible leaders at the helm.”
It remains to be seen how much public trust can be regained by such an appointment. For many organisations finding themselves in need of business support solutions following a crisis, their story is one of ‘fat cat’ excess. But the Co-op’s problems have been somewhat different, encompassing bungled appointments and incompetence, exposing the organisation as being more political than business-like – which is unlikely to help its ethical image.
While Flowers’ personal behaviour has been detrimental to the co-op brand, many observers agree that the greatest threat to the bank and its management’s credibility is simply the appointment of a man to run a bank who has a distinct lack of industry credentials. Len Wardle also resigned as chair of the Co-op late last year, in a scandal that previously centred on financial mismanagement but was subsumed by the more personal revelations about Flowers.
Fry added that while high-profile resignations assisted in drawing a line in the sand on a crisis, there did need to be justification for them. “A hasty move to the exit by a CEO or chairman can be more damaging as people understandably ask the question of what else they are trying to hide as they try and draw the fire of the media snipers.”
He continued, in words that will interest many drawing upon business support solutions, that while the Co-op chairman’s departure did appear to lessen the media pressure, it may have proved “too little too late” for the firm’s overall brand, with fresh attention set to be drawn to the story by the numerous investigations and reviews over the coming months.