The Co-operative Bank has appointed Dennis Holt as its new chairman following its former chairman becoming embroiled in a drugs scandal.
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The Co-op Bank hit headwinds last year when it discovered a £1.5 billion black hole in its balance sheet, leading to hedge funds and other investors taking a stake in the bank. Two separate reports have blamed poor governance for the bank’s struggles.
Former chairman of the bank Paul Flowers was arrested in November last year in connection with a drugs supply investigation. In response, chancellor George Osborne ordered an inquiry into his appointment.
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The most recent report, from the Treasury Select Committee, noted, “The deficient composition of the Co-op Bank’s governance was embodied in Paul Flowers, who lacked any of the requisite financial experience to act as chairman of a bank.”
MPs added that Flowers lacked both the desired experience and skills for the role. The committee concluded that Flowers should no have been selected, the regulator should not have permitted his appointment and he would not be appointed chairman of a bank today.
Holt joined the bank’s board in February and has been acting as interim chairman since the beginning of October. He added that progress at the bank has been made and the board was clear on what needed to be done in the months ahead.
Niall Booker, chief executive of the bank, commented, “I am delighted that Dennis Holt has been appointed to chair the board of the bank.
“His involvement in a wide range of challenging market environments will serve the bank well as we continue to restore trust in our brand and focus on building a credible, efficient and differentiated alterative for customers.”
Photo: ell brown via Flickr