The Co-operative Group chairman Len Wardle has exited the business early following the scandal over its former banking chair Paul Flowers.

Wardle had intended to retire next year but has left the group early. Ursula Lidbetter, currently group deputy chair and chief executive of the Lincolnshire Co-operative Society, will replace Wardle.

Lidbetter will chair the group through its review into “inappropriate behaviour” and the future structure of the board, which kicked off yesterday.

The move comes in the wake of former Co-operative Bank chairman Paul Flowers being photographed apparently buying illegal drugs.

Wardle said: “The recent revelations about the behaviour of Paul Flowers, the former chair of The Co-operative Bank, have raised a number of serious questions for both the bank and the group. I led the board that appointed Paul Flowers to lead the bank board and under those circumstances I feel that it is right that I step down now, ahead of my planned retirement in May next year.”

He added: “I have already made it clear that I believe the time is right for real change in our operations and our governance and the board recently started a detailed review of our democracy. I hope that the group now takes the chance to put in place a new democratic structure so we can modernise in the interests of all our members.”

Lidbetter said: “These are very difficult times for The Co-operative Group and the wider movement, but I believe that we can and will come through this period stronger than ever by facing up to our challenges.

“I look forward to working with the new management team, who have already started on the important work of turning around our businesses. In addition, I look forward to working with my fellow Board members and the wider membership as we change the way we are organised and governed in the interests of all our seven million members.”

The Co-op chair steps down early amid management controversy