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UK's Co-op appoints Myners on 1 pound salary to lead review

Source: Reuters - Thu, 12 Dec 2013 09:47 AM
Author: Reuters
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By Kate Holton and Belinda Goldsmith

LONDON, Dec 12 (Reuters) - Britain's troubled Co-operative Group named ex-Treasury minister Paul Myners to its board on Thursday on a token salary of just one pound ($1.6) to help review the running of the customer-owned retail-to-funerals operator.

The appointment takes effect immediately, with Myners saying the group was at a crucial point in its development and facing serious challenges in terms of business performance.

The Co-op has been rocked in recent months after the former chairman of its bank arm Paul Flowers was arrested as part of an investigation into the supply of illegal drugs.

Finance minister George Osborne has ordered an inquiry into Co-op Bank and Prime Minister David Cameron has questioned why Flowers, a one-time local Labour politician and Methodist preacher with no banking qualifications, was judged suitable for the chairmanship during a period when the bank nearly collapsed.

A 1.5 billion pound capital shortfall at the bank has resulted in it falling under the control of U.S. hedge funds.

Myners, 65, was previously Financial Services Minister in the Treasury and has been chairman of retailer Marks & Spencer , Guardian Media Group and Land Securities.

Myners said his role was to review the governance of the Co-operative Group and restore its position at the heart of communities up and down Britain.

"The core part of the business has been going very well. The bank has got itself into a terrible mess and that has raised questions about the overall leadership of the group," Myners told BBC Radio.

"I am coming in to use some of my experience in other organisations to say what does good governance look like, how far are they are from that, and where are the gaps we are going to address."

He said he would be paid one pound a year for his work.

Myners, who is a member of the upper house of parliament, will join the Co-op board as a senior independent director. He will also chair the board's governance review, which is looking into how the group and the board is run.

The Co-op said it was also looking to appoint two additional independent non-executive directors to its board.

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