Paul Myners, the former chairman of Marks and Spencer, has defended Sir Stuart Rose, the retailer’s chief executive, who is facing an investor revolt over his promotion to chairman. M&S announced three weeks ago that Rose would become executive chairman of the retailer from June 1, and stay on until his retirement in July 2011, to the dismay of some of its investors.
Myners said that the most important thing was that the retailer would now keep Rose for three years longer than initially agreed, according to The Telegraph. He said: “We must ensure that we see the wood for the trees. The really good news for M&S shareholders is that Stuart is committing for a further three years.”
A number of the chain’s biggest institutional shareholders have said the decision is bad practice, arguing it violates official corporate governance guidelines and removes a strong independent voice to question Rose’s strategy.
Rose has been credited with turning M&S’ fortunes around, and the retailer argues that Rose’s promotion was in the best interest of the company and shareholders. Rose, Lord Burns and senior non-executive Sir David Michels will meet shareholders this week, but they are not expected to offer any compromises.
Myners left M&S in 2006 after the company’s senior non-executive Kevin Lomax said that the friendship between Rose and Myners rendered the latter insufficiently independent to chair the company. Rose and Myners forged a close relationship, while battling a hostile takeover bid from Sir Philip Green, and Rose publicly defended Myners after the boardroom argument, which led to his departure.
Institutional shareholders’ opposition to Rose’s promotion appeared to harden over the weekend, after Schroders said the change makes an “appalling example”. Richard Buxton, head of UK equities at Schroders, said: “Rose is sufficiently arrogant to say that if you don’t want me to take this role I will leave. The company is bigger than an individual.”
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