Euan Sutherland has resigned with immediate effect as CEO of The Co-operative Group.
Sutherland said in a statement that he will not accept previouslyagreed long-term incentive payments or retention payments.
In his place, chief financial officer Richard Pennycook has been given the interim role.
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.”
He added that in order to reduce its significant debt, The Co-op urgently needs fundamental governance reform and a revitalised membership.
According to the chair of The Co-op Group, Ursula Lidbetter, Sutherland’s resignation must act as a catalyst for the “real and necessary change” the Group must now go through.
“It is with deep regret that I accept Euan’s resignation,' she said. 'Last year, Euan and his team saved the 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.'
She added: “I would 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 reform our governance.'
Pennycook, meanwhile, has said he will plot a steady course to continue the commercial plans put in place under Sutherland’s leadership.
Sutherland’s resignation letter, as reported by the BBC this morning,suggested the group is currently “ungovernable”, and according to BBC business editor Robert Peston, Sutherland seemed “demoralised and fed-up'.
But the ex-CEO added: “I would like to thank all of The Co-op's hard working colleagues for the support they have given me during my time. I wish them all well. The Co-operative has some wonderful people who deserve a great future.'
Last month, The Co-op launched a nationwide YouGov poll to ask the public for their views on its future.
The poll is open until 24 March and results will be published at the Group's annual meeting in May.
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