Co-op chairman wilts over Flowers

Len Wardle has resigned, saying he was responsible for the appointment of Rev Paul Flowers.

by Emma Haslett

You know your banking sector is really in crisis when a vicar at the top of a lender known for its ‘ethical credentials’ is at the centre of a scandal. And the revelations about the Revered Paul Flowers keep on coming: the latest development being that (current) Co-operative Bank chairman Len Wardle (a man whose name is nearly as silly as the story he’s involved in) has handed in his resignation, with immediate effect.

The fun began in earnest on Sunday, when the Daily Mail published a video featuring Flowers buying cocaine and crystal meth and enquiring about buying ketamine for a ‘two-day, drug fuelled gay orgy’ after he was ‘grilled’ by the Treasury Select Committee at the beginning of this month. Flowers, who stepped down as chairman in May this year, rapidly admitted guilt, blaming ‘the pressures of my role with the Co-op Bank’.

Questions had already been asked about his suitability as the chairman of a major bank when, during his Treasury Select Committee appearance, he didn’t seem to know how big the lender’s balance sheet was – his guess was £3bn. The actual answer was £47bn.

Now Wardle has handed in his notice. In a statement, he said he ‘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.

‘I have already made it clear that I believe the time is right for real change in our operations and our governance,’ he added – a pretty strong candidate for ‘understatement of the century’.

Wardle’s deputy, Ursula Lidbetter (also currently chief executive of the Lincolnshire Co-op), will step into his role. There’s a job we don’t envy: let’s not forget that the bank (still) has a gaping £1.5bn hole in its balance sheet. At the beginning of this month – just before Flowers’ appearance before the Treasury Select Committee – it reached an agreement with bondholders which means six major US hedge funds will end up with a 70% stake in it.

At the time, the Co-operative said it would retain ‘effective control’ and the bank’s leadership assured customers – many of whom saw it (note our use of the past tense) as a virtuous alternative to the ‘big four’ – that its ethical credentials would be written into its constitution. It will be for Lidbetter, whose bio says she’s a ‘passionate advocate for co-operation’, to defend that constitution. Now would be an easy time for the bank’s new hedge fund overlords to start ceding more control…

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