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M&S - Ehtics

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Submitted By loricous
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“They’ve got an opinion. We’ve got an opinion. We won. End of story.”

A case study on non-compliant corporate governance at M&S, adapted from articles by Steve Hawkes, Patrick Hosking, Peter Stiff, John Waples, Richard Fletcher, Marcus Leroux , Catherine Boyle, David Wighton and Murad Ahmed in The Times and Sunday Times, 11/03/08 to 08/07/0

11/03/08

Marks & Spencer (M&S) gave its second-biggest shareholder (Legal and General, L&G) only one hour’s notice before announcing that it would promote Sir Stuart Rose to the position of executive chairman, effective June 1st. Sir David Michels will be deputy chairman. Currently the senior non-executive director, he is no lightweight. However, given Sir Stuart’s personality, he and other non-executive directors will have to work hard to curb an autocratic bias. Lord Burns, M&S’s outgoing chairman, did not consult L&G until 9am on the morning of the announcement. Hours later, L&G issued a rare public statement condemning the promotion as “unwelcome.” Mark Burgess, head of equities for L&G, said: “We believe strongly in the separation of the roles of chairman and chief executive.” M&S apparently contacted one other large shareholder on Monday to see if it would put its name to a statement supporting the plan. That shareholder refused. M&S said it delayed informing key shareholders because of fears that details about the reshuffle could leak to the media. A spokeswoman said: “We have now spoken to half our institutional investor base to explain the reasons behind our announcement and they are all broadly supportive with one exception.” Lord Burns said that four major shareholders backed the plan: “I’ve been talking to Stuart now for at least a year about the whole question of what was going to happen beyond 2009. He was not attracted by the idea of … nothing really changing.” The

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