Marks & Spencer this week recorded improved results after its disastrous pre-Christmas trading, but was embroiled in a fierce row with shareholders over group strategy and corporate governance. The retailer announced a like-for-like sales drop of 4.2 per cent during the 13 weeks to 28 March, but an improvement on its 7.1 per cent decline over the previous quarter. But a group of M&S shareholders, led by the Local Authority Pension Fund Forum, are demanding CEO Sir Stuart Rose give up his executive chairman role a year early and are trying to get other investors to support the plan.
- The reaction?
Ian Greenwood, the LAPFF chairman, said: 'The separation of powers at the top of the company is a fundamental governance principle and the powerful group is not alone in its concerns.' Newspapers are already speculating on Rose's replacement - with ex-Asda chiefs Allan Leighton and Archie Norman in the frame. However, Sir Richard Greenbury, M&S head and architect of Britain's Boardroom Governance Rules, is backing Rose.
- Who are the PR players?
The retailer's long-standing director of comms Flic Howard-Allen is joining H&K in June to be replaced by Tulchan Communications' Dominic Fry. Tulchan is M&S' financial agency.
- What happens next?
When Rose took on the executive chairman's role last July, 22 per cent of shareholders protested - this number does not look like falling. Pressure is mounting on Rose to relinquish the post. It looks inevitable Rose will have to leave the chairmanship early, but where M&S goes is unclear. Debate rages as to whether the firm is flawed strategically or an innocent casualty of the economy.
30% of M&S' problems were due to own 'errors', said Rose