Burns' arrival puts end to M&S squabble

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The Independent Online

Marks & Spencer ended weeks of boardroom squabbling over the fate of its chairman yesterday by striking a compromise. Lord Burns, the chairman of Abbey National, is to succeed Paul Myners, but not until July 2006.

Marks & Spencer ended weeks of boardroom squabbling over the fate of its chairman yesterday by striking a compromise. Lord Burns, the chairman of Abbey National, is to succeed Paul Myners, but not until July 2006.

The decision to appoint Lord Burns, who will be paid £400,000 a year when he assumes the chairmanship, ends Mr Myners' dreams of turning his interim role into a more permanent one.

But it also allows Kevin Lomax, the head of M&S's nominations committee and the company's senior independent director, to claim victory in his quest to elect an outsider to chair the most challenging job in British retail. Mr Lomax was also worried that Mr Myners had become too close to Stuart Rose, the chief executive.

M&S said Lord Burns, would join in October as deputy chairman and take over from Mr Myners at its annual meeting in July 2006. The timetable will give Lord Burns, who is best known for his time serving successive chancellors of the exchequer at HM Treasury, a chance to acquaint himself with chairing a retailer, a first for the 61-year-old.

It will also give Mr Myners, who stepped up from non-executive director to chairman last May to help the group fight off the advances of Philip Green, the prospect of leaving the group in better shape than when he took on the role. So far, there is no sign that M&S has turned the corner.

Lord Burns, who was made a life peer in 1998, said he had accepted the job because "it's a very interesting challenge and I like complicated things". He said he shops for clothes at M&S but is "more of an eater" than a food shopper.

Asked what he thought of the semi-public boardroom infighting that blighted the succession process, Lord Burns said: "I don't like to see that kind of thing. I don't see why that [the boardroom divisions] can't be fixed. There is no reason why people shouldn't work well together."

In swapping Mr Myners for Lord Burns, M&S will get a chairman with an even broader portfolio of outside interests. The life peer, who was chief economic adviser to the Treasury during the Eighties, holds four other boardroom positions, including chairing Glas Cymru (Welsh Water). He recently led government reviews into hunting and about whether to renew the BBC Charter.

The Queens Park Rangers fan has until July to complete a review of the Football Association, and is also searching for a replacement for Lord Stevenson, the Pearson chairman.

M&S shareholders turned on Luc Vandevelde, the group's former chairman, for allowing his external appointments to distract him from his role at the retailer. But Lord Burns defended suggestions that he risked being too busy. He said: "I've got to get through the football review but I've done enough of that sort of thing. This job is two, two and a half days a week. I will make sure I can give the right amount of time to it."

Lord Burns' salary at M&S will be £175,000 while he is deputy chairman but will rise to £400,000 once he takes over the chairmanship. That is twice the amount Mr Myners earns. A spokeswoman for the company said it "reflected the market rate", which was ratcheted higher by Niall FitzGerald's £500,000-a-year package as chairman of Reuters.

The City was underwhelmed by the news of the new chairman, marking M&S's shares down 1p to 325p. But Standard Life and Scottish Widows, two of the group's biggest shareholders, welcomed the board's decision, expressing hopes that the company would now focus on the continued slide in its clothing sales.

Guy Jubb, the head of corporate governance at Standard Life, said: "The directors, executive and non-executive, must now demonstrate a united commitment to provide entrepreneurial leadership ... to enable Marks & Spencer to realise its full potential."

Richard Singleton, the director of corporate governance at F&C Asset Management, said: "Terry Burns has huge experience, particularly of significantly larger organisations like the civil service. He will be able to look at the business with fresh eyes."

Although Lord Burns' previous role in public City life was to sell Abbey National, he said this would not make him a pushover should Mr Green return. "I have turned down bids as well as accepted them," he said.