This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7496685.stm
The article has changed 11 times. There is an RSS feed of changes available.
Version 2 | Version 3 |
---|---|
M&S executives face shareholders | |
(about 10 hours later) | |
Marks and Spencer bosses are meeting with their shareholders in what is likely to be a stormy meeting. | |
Some of the retailers' biggest shareholders are against chief executive Sir Stuart Rose also taking on the role of chairman. | Some of the retailers' biggest shareholders are against chief executive Sir Stuart Rose also taking on the role of chairman. |
It is thought up to 30% may abstain or vote against his re-appointment as a director in protest. | It is thought up to 30% may abstain or vote against his re-appointment as a director in protest. |
Investors will also want to know more about the outlook for M&S after a sharp drop in sales. | Investors will also want to know more about the outlook for M&S after a sharp drop in sales. |
Its shares fell almost 25% after Sir Stuart said last week that the company faced up to two years of difficult economic conditions that will hit its profits. | Its shares fell almost 25% after Sir Stuart said last week that the company faced up to two years of difficult economic conditions that will hit its profits. |
'Dangerous concentration of power' | |
M&S's plans to appoint Sir Stuart executive chairman, a position that combines the roles of chief executive and chairman. | M&S's plans to appoint Sir Stuart executive chairman, a position that combines the roles of chief executive and chairman. |
A company's chief executive is in charge of the management team that runs the business on a day-to-day basis. | |
The chairman is in charge of the board of directors - both non-executive and executive - which is acting on behalf of shareholders to make sure the management team is serving their interest. | |
Holding a dual role is not unheard of, but critics say it conflicts with UK corporate governance guidelines. In Sir Stuart's case, it has proved unpopular with some shareholders. | |
"Combining the two roles in one person represents a dangerous concentration of power that is potentially detrimental to board balance, effective debate and board appraisal," corporate governance firm PIRC said. | "Combining the two roles in one person represents a dangerous concentration of power that is potentially detrimental to board balance, effective debate and board appraisal," corporate governance firm PIRC said. |
'Unwelcome distraction' | |
But Sir Stuart defended his role to the company's investors, insisting that the board's "strong, independent and challenging" non-executive directors would keep him in check. | |
Supporting Sir Stuart, M&S deputy chairman Sir David Michels said: "He unquestionably has the right set of skills to take Marks and Spencer forward and to complete the job he has started. | |
There will be no specific vote on whether Sir Stuart should hold both posts, but PIRC has recommended shareholders vote against his re-appointment as a director to show their opposition to the move. | |
In a letter to shareholders in April, M&S said appointing a new chief executive in 2008 or 2009 to replace Sir Stuart "was likely to be a damaging and unwelcome distraction at precisely the time that the business needed clear leadership to sustain its recovery and transformation". | In a letter to shareholders in April, M&S said appointing a new chief executive in 2008 or 2009 to replace Sir Stuart "was likely to be a damaging and unwelcome distraction at precisely the time that the business needed clear leadership to sustain its recovery and transformation". |
Takeover speculation | Takeover speculation |
Sir Stuart was brought in to fight off a takeover attempt from the billionaire owner of Top Shop, Sir Philip Green, in 2004. | Sir Stuart was brought in to fight off a takeover attempt from the billionaire owner of Top Shop, Sir Philip Green, in 2004. |
Rumours that Sir Philip might be about to try again circulated on Monday, giving a much-needed boost to M&S shares. | Rumours that Sir Philip might be about to try again circulated on Monday, giving a much-needed boost to M&S shares. |
M&S shares closed 7% higher at 231.50 pence. Before last week's profits warning they had been trading at more than 330p. | M&S shares closed 7% higher at 231.50 pence. Before last week's profits warning they had been trading at more than 330p. |
However, Sir Philip denied reports that he had been buying up M&S shares. | However, Sir Philip denied reports that he had been buying up M&S shares. |