Gears grind at Stobart as chairman crashes out

In January Avril Palmer-Baunack was 'the right person' to head the board. Now her role is 'no longer appropriate'. Lucy Tobin reports on fresh turmoil that has fuelled fears over corporate governance at the haulage giant

The cabs of Eddie Stobart's lorries are fairly roomy, but even they wouldn't have had enough seat-belts to buckle down the number of non-executive directors that have departed from Britain's biggest road haulage company in the past two years.

Six have gone in 24 months; two of the non-execs who slammed the door on the Stobart boardroom in the past year only joined in May 2011. And, just three months after a boardroom coup in which Stobart Group claimed it needed – and appointed – an executive chairman, the haulier made another U-turn.

That executive chairman role is "no longer appropriate," Stobart said, adding that the woman sitting in that driving seat, Avril Palmer-Baunack, will vacate it immediately. The company famous for its green Eddie Stobart articulated lorries and owner of Southend and Carlisle airports only promoted Ms Palmer-Baunack from deputy chief executive to executive chairman in January. At the time, the chief executive, Andrew Tinkler, said: "Avril has demonstrated to the board that she is the right person to carry out this demanding role."

Her appointment was part of a boardroom shake-up backed by shareholders including the influential fund manager Neil Woodford, whose Invesco Perpetual holds a 37 per cent stake in Stobart. Then-chairman Rodney Baker-Bates was booted out, replaced by Ms Palmer-Baunack, who was given the task of selling off failing parts of the business.

But Stobart said 69-year-old Mr Baker-Bates, who had announced his retirement and was set to quit Stobart's board, will have to postpone his life of Riley. He is now staying on until a new chairman is appointed, while the senior independent director, Alan Kelsey, whose role included looking after the interests of minority shareholders, is out: he "has indicated his intention to leave the board at the same time as Avril," Stobart said.

"Rather odd," was the verdict in the City. Gerald Khoo, a support services analyst at Espirito Santo, explained: "The board has decided that the role of executive chairman is no longer appropriate against the newly improved trading background. In our view, this is a rather odd explanation. If anything, today's announcement raises yet more question marks over corporate governance."

Those question marks have hovered over Stobart with growing regularity in recent years. Shareholder advisory groups weren't impressed with the haulage company's appointment of an executive chairman in January. The shareholder advisory agency Manifest waved around the corporate governance code, which reads: "There should be a clear division of responsibilities at the head of the company between the running of the board and the executive responsibility for the running of the company's business. No one individual should have unfettered powers of decision."

"The code is clear," Paul Hewitt of Manifest added. "The chair shouldn't have executive responsibility."

A year earlier, Stobart faced controversy over a £101m property deal with its top executives. The company bought the Wadi Properties portfolio back from its chief executive, Mr Tinkler, and his brother-in-law William Stobart, chief operating officer, for around £12m, as well as assuming almost £89m of bank debt. Stobart said the portfolio had been independently valued at £98.9m.

But Messrs Tinkler and Stobart had previously bought the portfolio from the Stobart business for £140m in 2008 before its value plunged during the recession and it breached banking covenants. The purchase went through, but investors voiced disquiet over the values and the fact that Ben Whawell, Stobart's finance director, was also a director of Wadi Properties, whilst Mr Stobart, who is the son of Eddie, the lorry empire's founder, and Mr Tinkler, who happens to be William's brother-in-law, together own 12.6 per cent of Stobart Group.

The investors' group Pirc's long note on the deal concluded: "There are inherent conflicts of interest in this transaction. The independent directors have provided no basis to their conclusion that the acquisition had a fair price."

Since then the revolving door at Guernsey-incorporated Stobart has barely stopped moving. It tried to show off about a new three-year distribution deal with Tesco, and said that its results for the year to March will be "moderately" ahead of City expectations. Every little helped – the shares rose slightly, up 2.25p to 82.75p – but that didn't make a dent on the year's progress. Stobart's share price has lost more than a quarter of its value in 12 months. The haulage group was kicked out of the FTSE 250 last month.

Outside the City, Stobart is best known for its fleet of trucks, each emblazoned with a girl's name on the front, and the 20,000 "fans" who have joined the Stobart Members Club and spend time spotting its vehicles.

None is likely to spy one named "Avril" trundling down a motorway any time soon.

Suggested Topics
News
More than 90 years of car history are coming to an end with the abolition of the paper car-tax disc
newsThis and other facts you never knew about the paper circle - completely obsolete today
News
people'I’d rather have Fred and Rose West quote my characters on childcare'
Life and Style
The new Windows 10 Start Menu
tech
Arts and Entertainment
There has been a boom in ticket sales for female comics, according to an industry survey
comedyFirst national survey reveals Britain’s comedic tastes
PROMOTED VIDEO
Travel
Bruce Chatwin's novel 'On the Black Hill' was set at The Vision Farm
travelOne of the finest one-day walks you could hope for - in Britain
Sport
footballManchester City 1 Roma 1: Result leaves Premier League champions in danger of not progressing
Arts and Entertainment
Gay and OK: a scene from 'Pride'
filmsUS film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
News
i100
Life and Style
Magic roundabouts: the gyratory system that has excited enthusiasts in Swindon
motoringJust who are the Roundabout Appreciation Society?
Arts and Entertainment
Hilary North's 'How My Life Has Changed', 2001
booksWell it was good enough for Ancient Egyptians and Picasso...
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

Law Costs

Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

Day In a Page

Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

The children orphaned by Ebola...

... then rejected by surviving relatives over fear of infection
Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
The magic of roundabouts

Lords of the rings

Just who are the Roundabout Appreciation Society?
Why do we like making lists?

Notes to self: Why do we like making lists?

Well it was good enough for Ancient Egyptians and Picasso...
Hong Kong protests: A good time to open a new restaurant?

A good time to open a new restaurant in Hong Kong?

As pro-democracy demonstrators hold firm, chef Rowley Leigh, who's in the city to open a new restaurant, says you couldn't hope to meet a nicer bunch
Paris Fashion Week: Karl Lagerfeld leads a feminist riot on 'Boulevard Chanel'

Paris Fashion Week

Lagerfeld leads a feminist riot on 'Boulevard Chanel'
Bruce Chatwin's Wales: One of the finest one-day walks in Britain

Simon Calder discovers Bruce Chatwin's Wales

One of the finest one-day walks you could hope for - in Britain
10 best children's nightwear

10 best children's nightwear

Make sure the kids stay cosy on cooler autumn nights in this selection of pjs, onesies and nighties
Manchester City vs Roma: Five things we learnt from City’s draw at the Etihad

Manchester City vs Roma

Five things we learnt from City’s Champions League draw at the Etihad
Martin Hardy: Mike Ashley must act now and end the Alan Pardew reign

Trouble on the Tyne

Ashley must act now and end Pardew's reign at Newcastle, says Martin Hardy
Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

Isis an hour away from Baghdad -

and with no sign of Iraq army being able to make a successful counter-attack
Turner Prize 2014 is frustratingly timid

Turner Prize 2014 is frustratingly timid

The exhibition nods to rich and potentially brilliant ideas, but steps back
Last chance to see: Half the world’s animals have disappeared over the last 40 years

Last chance to see...

The Earth’s animal wildlife population has halved in 40 years
So here's why teenagers are always grumpy - and it's not what you think

Truth behind teens' grumpiness

Early school hours mess with their biological clocks
Why can no one stop hackers putting celebrities' private photos online?

Hacked photos: the third wave

Why can no one stop hackers putting celebrities' private photos online?