Co-operative group chief executive Euan Sutherland has resigned with immediate effect and finance boss Richard Pennycook will succeed him on an interim basis.
Sutherland will not accept retention and other payments that had been agreed and said he hopes the business will be professionalised under new leadership.
Sutherland said: “It is with great sadness that I have resigned as chief executive. I have given my all to the business and had hoped to be able to lead its revival.
“However, I now feel that until the group adopts professional and commercial governance it will be impossible to implement what my team and I believe are the necessary changes and reforms to renew the group and give it a relevant and sustainable future.
“Saving the Co-operative Bank and with it the Co-operative Group from administration was a huge task, but the changes required do not stop there, with fundamental modernisation needed to safeguard the future for our 90,000 colleagues and millions of members.
“The group must reduce its significant debt and drive major efficiencies and growth in all of its businesses, but to do so also urgently needs fundamental governance reform and a revitalised membership.
“I will not accept the retention payments and long term incentive payments previously agreed for the delivery and protection of value in the group and the bank, even though this was successfully delivered.
Co-operative Group chair Ursula Lidbetter, said: “It is with deep regret that I accept Euan’s resignation. Last year, Euan and his team saved the Co-operative Bank, without recourse to the taxpayer, and in doing so rescued the group from the biggest crisis in its 150-year history. They have worked night and day to renew the organisation and to give it a sustainable future.
“Euan’s resignation must now act as a catalyst for the real and necessary change which the group must go through. I would like to thank Euan for his hard work and leadership and to wish him the very best for the future.
“I also like to thank Richard for stepping up to lead the organisation at this critical juncture. We will start the process to appoint a permanent successor and urgently to reform our governance.”
Pennycook said: “Our businesses continue to perform in line with the clear commercial plans put in place under Euan’s leadership and I and the team will plot a steady course in the coming months.”
Co-operative Group names Richard Pennycook chief executive on permanent basis
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Richard Pennycook named interim Co-op chief executive as Sutherland resignation confirmed