C&W considers articles shake-up
Friday 24 November 1995
Cable & Wireless, the telecommunications group torn apart earlier this week by boardroom strife, may have to change its articles of association to fill the positions of chairman and chief executive with its preferred candidates.
Under its current articles, the company is restricted in its choice of top management by nationality. A clause in the articles reads: "No director may hold the office as executive chairman or if there is no such executive chairman the office of chief executive unless he is a British citizen within the meaning of the British Nationality Act, 1981."
It is believed that the company would seek to remove this restriction, with the support of its shareholders, if it found a preferred candidate or candidates who did not conform to the articles' requirements. "There would be ways of doing it. We would not anticipate any problems," an insider said.
The nationality clause means at the moment, for example, with Brian Smith in the role as non-executive chairman, that the company would have to restrict its search for a chief executive to British nationals.
This restriction, unless altered, could severely restrict the company's search for suitable candidates within the industry. There are only three big telecommunications operators within the UK - C&W, British Telecom and Vodafone. One possible candidate for the job is Christopher Gent, Vodafone's managing director, who has been on the Vodafone board since the company started in 1985
Mr Smith has already warned that the search for a new chief executive could take at least a year. Earlier this week both Lord Young, the executive chairman, and James Ross, chief executive, departed after a boardroom row which has left the company in turmoil.
Mr Smith is reported as saying the board would probably look for "somebody with an understanding of the industry, clear ideas and focus and the ability to act today". Industry analysts have said that to fulfil these requirements the search might have to include candidates outside the UK.
Speculation that the company was vulnerable to a takeover bid receded slightly yesterday after a couple of days of stock market excitement. The shares moved down 13p to 453p yesterday on profit-taking.
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