The former Labour City minister has been brought in to professionalise its board and lead a review of its internal democracy after the resignation of the chairman of the group and its banking subsidiary.
Lord Myners admitted the Co-operative Group faced a “daunting” task to recover from and reform its governance after being appointed as the first independent chairman of the mutual.
Lord Myners told the 19-strong board on Thursday that their job was “pretty daunting”. The £10bn turnover group spans food, pharmacy and funerals. “The Co-op is involved in a greater range of businesses than any FTSE 100 company,” he said. “They face a greater challenge than most plc directors.”
The board is made up of 14 elected representatives and five heads from the larger regional co-ops. Lord Myners, who is 65, will sit on the board as senior independent director and be paid a nominal fee of £1 a year.
He told the Financial Times the board was “large by most standards” but refused to say whether he would recommend reducing it.
Lord Myners also said the mutual would remain member-owned. While he would produce recommendations on board governance by the May annual meeting changes to member democracy would take longer.
He said “his instinct” was that sell-offs of part of the group had gone far enough. It has shed its asset management and insurance arms while the bank is to be listed with the group holding just 30 per cent.
The former Marks and Spencer chairman, who undertook a review on corporate governance of mutual insurers for the Treasury in 2004, is the first independent non-executive director to be appointed to the main board of the mutual. It is looking to appoint two further non-executive directors.
The governance review, which was launched in November, comes in addition to a separate internal report from Sir Christopher Kelly into how the problems at the bank developed.
Lord Myners will spend 2-3 days a week at the Manchester-based group. He already has commitments as a member of the House of Lords and non-executive chairman of both Anglo-Swedish hedge fund Cevian Capital and Autonomous, a financial research firm.
Lord Myners was appointed to the newly created role of financial services minister in October 2008, at the height of the financial crisis – a role he held until May 2010.
Separately, Legal & General has hired Goldman Sachs to advise on a possible bid for a chunk of the Co-op’s general insurance business, people familiar with the matter said.
The FTSE 100 insurer would only buy the right to the Co-op’s policy renewals, worth tens of millions of pounds. No staff or property would transfer to L&G. It would team up with Catalina, which would buy the “back book” of historic policies.
Several other potential bidders are still in the running. L&G declined to comment.
Additional reporting by George Parker and Alistair Gray