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Emma Harrison has stepped down as chairman of her welfare-to-work firm A4e, she has said in a statement.
It comes a day after she quit her role as the government'​s "​family champion"​ amid a police probe into irregularities at the Slough-based company.
As part of its work, A4e handles millions of pounds worth of government contracts for welfare-to-work schemes.
She said she had confidence in the business and hoped her latest decision would help the management team.
In the statement, Ms Harrison, who is also one of the company'​s five shareholders, said: "​This has been a very tough decision for me, as I have spent my entire 25-year career building up this business and I believe so strongly in the importance of the work it does.
"​But it is precisely because this work is so important that I do not want the continuing media focus on me to be any distraction for A4e, for its more than 3,500 employees, and for the tens of thousands of people across the UK and globally that look to this company to give them hope of finding employment."​
On Wednesday it was revealed former workers at the company - two women, aged 28 and 49 and two men, aged 35 and 41 - were arrested last month on suspicion of fraud and bailed until mid-March.
A4e said the alleged case dated back to 2010 and had been uncovered by its own internal investigation.