Len Wardle resigned today (November 19) with immediate effect from his position as leader of the group, including its food, drink and grocery retail businesses.
He will be replaced by current group deputy chair and chief executive of the Lincolnshire Co-operative Society Ursula Lidbetter.
Media reports claimed Flowers had been suspended by the Labour party for bringing the party into disrepute, when he was allegedly caught buying and using illegal drugs. The Methodist minister has also been suspended by his church.
£300 for cocaine
A video on the Mail on Sunday website allegedly shows Flowers handing over £300 for cocaine.
“The recent revelations about the behaviour of Paul Flowers, the former chair of The Co-operative Bank, have raised a number of serious questions for both the Bank and the Group,” said Wardle. “I 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.”
Flowers, who was The Co-operative Bank chairman between 2010 and April this year, has served as a Labour councillor for Bradford for a decade.
Conservative MP Brooks Newmark told BBC Radio 4’s Today programme that Flowers had not been competent in the job and questioned his appointment.
‘His performance was lamentable’
“Clearly, he was not fit to be in that position and while obviously his performance was lamentable, I also think unfortunately that the regulators should be held to account on this. They should have done their due diligence to see whether Mr Flowers was fit and proper to run a major financial institution."
Lidbetter will now chair the company through the current governance review, which will include consideration of how the board is constituted and chaired, the firm said.
“I have already made it clear that I believe the time is right for real change in our operations and our governance and the board recently started a detailed review of our democracy.
“I hope that the group now takes the chance to put in place a new democratic structure so we can modernise in the interests of all our members."