Governance Matters

The Co-op Bank debacle shows just how much corporate governance matters, or in the Co-op's case how much the lack of it matters.

The Telegraph reports that Sir Christopher Kelly, a former official at the Treasury, is to publish a report next week which is expected to say that  the Co-op Bank failed last year due to a combination of woeful oversight and its disastrous merger with the Britannia Building Society.

Sir Christopher will say that only “cursory” checks were made before the 2009 takeover of the Britannia and that the Co-op's directors did not have “their eye on the ball”.

The proposals follow a review by Lord Myners, the former City minister who resigned from the board of the Co-op, who has looked at ways to improve how the Co-op as a whole is run.

Quite why the Co-op is some 10 years behind the basic tenets of the Higgs and Smith reports published in 2003 is beyond me.