Co-op boss quits after ‘toxic culture’ claims and cyber attack
Last month, the Co-op defended its culture and the behaviour of its bosses after reports said senior managers had complained of a ‘toxic’ environment.
The boss of the Co-op Group is to step down from the retail and funerals giant after a turbulent year which included a damaging cyber attack and claims of a “toxic” environment at the business.
Shirine Khoury-Haq’s departure came as the retail group also slid to an underlying loss for the past year after swallowing a £285 million hit to sales from the cyber attack.
She will step down as chief executive on March 29, with Kate Allum taking over as interim chief executive of the business.
Ms Allum is a member-nominated director on the Co-op Group board and will lead the business while it searches for a successor.
Ms Khoury-Haq’s departure after four years in the top role, and almost seven at the business, comes a month after reports of concerns over the culture at the top of the group.
In February, the Co-op defended its culture and the behaviour of its bosses after reports said senior managers had complained of a “toxic” environment at the retailer.
The grocery and services chain said it does not believe the criticisms “represent the views of our broader leadership and colleagues”.
The BBC reported that a letter, claiming to reflect the views of a large number of senior managers, had been sent to the chair and another member of the Co-op board last month.
The letter raised complaints about a culture of “fear and alienation” with some senior staff members feeling scared to raise concerns about business decisions in front of the company’s management, including Ms Khoury-Haq, according to previous reports.
The company defended its culture and the behaviour of its leadership team at the time.
On Thursday, Ms Khoury-Haq said: “It has been an honour to lead our Co-op as chief executive.
“It is not only a commercial enterprise, but also deeply embedded in communities, doing right by them and our members every day.
“Following last year’s cyber attack, the organisation is now ready to deliver on an ambitious strategy of stabilisation and transformation.
“This extends beyond the timeframe I had planned for my CEO tenure and now is the right moment to hand over to leadership that can commit to seeing the strategy through.”
Ms Khoury-Haq led the business through the recovery from the cyber attack in late April last year in which hackers accessed and extracted members’ personal data.
Shoppers were faced with empty shelves and issues with payments shortly afterwards caused by the fallout of the incident.
Fresh figures showed that a £107 million hit from the impact of the cyber attack helped drag the company to a loss for the past year.
The Co-op fell to a £126 million underlying pre-tax loss for the year to January 3, compared with a £45 million profit a year earlier.
It added that shopper behaviour also changed following the disruption caused by the attack, with transactions affected throughout the year as a result.
The group said it also faced “layered headwinds” of around £150 million during the year amid an increase in regulatory and labour costs.
Revenues fell by 2.3% to £11 billion for the year after the cyber attack had a £285 million impact on revenues.
It said it “lost trading momentum” as it focused on recovery and has also been impacted by a “contracting convenience market”.
