Councillor attacks top M&S bosses structure (From Bradford Telegraph and Argus)

Councillor attacks top M&S bosses structure

7:00am Friday 12th June 2009

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A senior Bradford councillor is leading the charge against Marks & Spencer bosses over the way the company is being run.

Coun Ian Greenwood, Bradford Council’s Labour group leader, is at the forefront of a national campaign to bring about boardroom changes at M&S, which is celebrating its 125th anniversary.

He will attend the annual shareholders’ meeting in London next month in his role as a national and local pension fund boss to try to force the M&S board to separate the roles of chairman and chief executive currently both held by Sir Stuart Rose.

Coun Greenwood is national chairman of the Local Authority Pension Fund Forum, representing more than 100 local authority pension funds, and also chairman of the West Yorkshire Pension Fund which has 214,000 members. He is marshalling forces to press Sir Stuart to relinquish his dual role a year earlier than planned.

Sir Stuart, who is credited with turning round the fortunes of the iconic retailer, became executive chairman as well as chief executive in June 2008 in a move which many regarded as contravening the corporate governance code and which the backers of the resolution believe opens up M&S to risk.

Shareholders, including Bradford Council with more than three million shares, LAPFF and a group of companies holding one share each, have tabled a resolution for the AGM calling for the appointment of an independent chairman to be brought forward to 2010.

Marks & Spencer is urging shareholders to reject the resolution which it claims would constrain the board in its ability to manage succession to the top jobs by imposing an unnecessarily short timescale.

Coun Greenwood, who will propose the critical resolution at he AGM, said it was unacceptable that Sir Stuart should continue to combine the two most senior roles in M&S for up to three years. He said Sir Stuart’s current position went against the Combined Code on Corporate Governance which states that the roles of chairman and chief executive should not be held by the same person.

Coun Greenwood said: “We are calling for the M&S board to take all reasonable and practical steps to bring forward the appointment of an independent chairman to July 2010.

“It is not right that an iconic company such as M&S should be undermining the corporate governance code. We believe that a company’s long-run profitability and its ability to deliver returns to shareholders are affected by its corporate governance structure.”

Part of the resolution states: “A poorly governed company introduces a greater degree of uncertainty to its business model.”

Coun Greenwood acknowledged the success of M&S directors in maintaining the firm’s independence and Sir Stuart’s leadership in developing new ideas and reorganising the stores but said the boardroom roles should be separated sooner rather than later.

e-mail: chris.holland @telegraphandargus.co.uk

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