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Shareholders to grill M&S bosses M&S executives face shareholders
(about 10 hours later)
Marks and Spencer executives are set to face a grilling from investors at its annual general meeting in London 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.
'Unwelcome distraction' '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.
Holding the dual role is against UK corporate governance guidelines and has proved unpopular with some shareholders. 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.
A company chief executive looks after the day-to-day running of the business, while a chairman is meant to make sure he or she is doing a good job. 'Unwelcome distraction'
There will be no specific vote on whether Sir Stuart should hold both posts, but PIRC recommends shareholders vote against his re-appointment as a director to show their opposition to the move. 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 speculationTakeover 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.