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
Start your day with The Independent, sign up for daily news emails
Sport
Adnan Januzaj and Gareth Bale
footballManchester United set to loan out Januzaj to make room for Bale - if a move for the Welshman firms up
News
Young Winstone: His ‘tough-guy’ image is a misconception
people
Arts and Entertainment
Ellie Levenson’s The Election book demystifies politics for children
bookNew children's book primes the next generation for politics
News
Outspoken: Alexander Fury, John Rentoul, Ellen E Jones and Katy Guest
newsFrom the Scottish referendum to the Ice Bucket Challenge, our writers voice their opinions
PROMOTED VIDEO
Arts and Entertainment
Pharrell Williams' “Happy” was the most searched-for song lyric of 2014
musicThe power of song never greater, according to our internet searches
News
i100
Sport
Tim Sherwood raises his hand after the 1-0 victory over Stoke
footballFormer Tottenham boss leads list of candidates to replace Neil Warnock
Arts and Entertainment
L to R: Hawkeye (Jeremy Renner), Captain America (Chris Evans) & Black Widow (Scarlett Johansson) in Avengers Assemble
film
News
Nigel Farage celebrates with a pint after early local election results in the Hoy and Helmet pub in South Benfleet in Essex
peopleHe has shaped British politics 'for good or ill'
Arts and Entertainment
Sink the Pink's 2013 New Year's Eve party
musicFour of Britain's top DJs give their verdict on how to party into 2015
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Sport
Yaya Sanogo, Mats Hummels, Troy Deeney and Adnan Januzaj
footballMost Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
News
Nigel Farage: 'I don't know anybody in politics as poor as we are'
i100
Voices
Strictly Come Dancing was watched by 6.9m viewers
voicesIt has been hard to form generally accepted cultural standards since the middle of the 19th century – and the disintegration is only going to accelerate, says DJ Taylor
Arts and Entertainment
Roffey says: 'All of us carry shame and taboo around about our sexuality. But I was determined not to let shame stop me writing my memoir.'
books
News
i100
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

Selby Jennings: VP/SVP Credit Quant- NY- Investment Bank

Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...

Selby Jennings: Quantitative Research | Equity | New York

Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...

Selby Jennings: SVP Model Validation

Not specified: Selby Jennings: SVP Model Validation This top tiered investment...

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

Day In a Page

War with Isis: The West needs more than a White Knight

The West needs more than a White Knight

Despite billions spent on weapons, the US has not been able to counter Isis's gruesome tactics, says Patrick Cockburn
Return to Helmand: Private Davey Graham recalls the day he was shot by the Taliban

'The day I was shot by the Taliban'

Private Davey Graham was shot five times during an ambush in 2007 - it was the first, controversial photograph to show the dangers our soldiers faced in Helmand province
Revealed: the best and worst airlines for delays

Revealed: the best and worst airlines for delays

Many flyers are failing to claim compensation to which they are entitled, a new survey has found
The stories that defined 2014: From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions

The stories that defined 2014

From the Scottish independence referendum to the Ice Bucket Challenge, our writers voice their opinions
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations

Disaster looming? Now you know where to head...

Which British city has become the first to be awarded special 'resilience' status by the UN?
Finally, a diet that works: Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced

Finally, a diet that works

Californian pastor's wildly popular Daniel Plan has seen his congregation greatly reduced
Say it with... lyrics: The power of song was never greater, according to our internet searches

Say it with... lyrics

The power of song was never greater, according to our internet searches
Professor Danielle George: On a mission to bring back the art of 'thinkering'

The joys of 'thinkering'

Professor Danielle George on why we have to nurture tomorrow's scientists today
Introducing my anti-heroes of 2014

Introducing my anti-heroes of 2014

Their outrageousness and originality makes the world a bit more interesting, says Ellen E Jones
DJ Taylor: Good taste? It's all a matter of timing...

Good taste? It's all a matter of timing...

It has been hard to form generally accepted cultural standards since the middle of the 19th century – and the disintegration is only going to accelerate, says DJ Taylor
Bill Granger recipes: Our chef's breakfasts will revitalise you in time for the New Year

Bill Granger's healthy breakfasts

Our chef's healthy recipes are perfect if you've overindulged during the festive season
Transfer guide: From Arsenal to West Ham - what does your club need in the January transfer window?

Who does your club need in the transfer window?

Most Premier League sides are after a striker, but here's a full run down of the ins and outs that could happen over the next month
The Last Word: From aliens at FA to yak’s milk in the Tour, here’s to 2015

Michael Calvin's Last Word

From aliens at FA to yak’s milk in the Tour, here’s to 2015