Directors at M&S contradict Greenbury on date for retirementt retirment

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The Independent Online
MARKS & Spencer was at the centre of a potentially damaging controversy over its succession plans for its chairman Sir Richard Greenbury yesterday when directors gave conflicting versions of events.

The storm blew up after Sir Richard said he had been asked by the board to stay on as chairman until he is 65, another four years. However, this statement was contradicted later when another M&S director said the board had not yet reached a decision.

Analysts said that the apparent split could indicate that Sir Richard did not have the unanimous backing of the board.

In response to questions on the issue, a clearly angry Sir Richard said: "I'm retiring at 65 just as my predecessors Lord Rayner and Lord Sieff did. That is generally the retirement age of M&S chairmen and I would greatly appreciate it if you would stop conjecturing about it. No one speculated about who was going to replace Sir Ian MacLaurin at Tesco four years before he retired."

He added later: "What with all the expansion plans we have at the moment the board asked me to stay on though I had been in favour of going a bit sooner."

After studying board minutes, an M&S spokesman said the decision for Sir Richard to stay on had been unanimous at a recent strategy review meeting. "The board noted the chairman's willingness to serve until he is 65 and the board then asked him to stay on," he said.

The spokesman added: "We probably haven't handled the issue that well."

Sir Richard, who became chairman in 1991, said it was possible that he would split the roles of chairman and chief executive, which would bring the company into line with best practice as suggested by the Cadbury committee. "Seven of the top 20 companies in this country combine the roles so I'm not unique," said Sir Richard. The possibility of separating the roles had been discussed but was "not part of current planning".

City analysts said a move by Sir Richard to non-executive chairman would be welcomed. "In this age of Cadbury, combining both roles is difficult to justify," one analyst said. "He is his own worst enemy at times because he has this "chip on the shoulder" attitude towards the City. It might be a good idea to have someone with a smoother style.

"It is a shame because he is a great merchant and there is nothing wrong with his strategy of expanding both in the UK and abroad while going into home shopping."

The debate over who might succeed Sir Richard was fuelled two months ago when Lord Stone, who has presided over the growth of the company's clothing operations, was moved to take over its food operations. Analysts say he now looks to be ahead of other candidates such as Keith Oates, the former favourite, Peter Salsbury and Andrew McCracken.

The questions over the boardroom structure came as Marks & Spencer reported a 6 per cent increase in full-year profits to pounds 1.17bn and said the fruits of its aggressive pounds 2.2bn expansion plan would not come until the turn of the century. The company even hinted that profits might fall in the current year, which would be the first time in living memory.

"We have a year in which we have to take a step back in order to take a gigantic leap forward," Sir Richard said.

Costs rose faster than group sales which rose by 5 per cent to pounds 8.4bn. Profits were hit by the strength of sterling and the Far Eastern turmoil which caused overseas profits to fall by pounds 23m.

M&S staff have been given a 4 per cent pay rise plus further performance benefits as part of an pounds 80m package.

The shares fell 4p to 576p.