Investors in Rentokil Initial have stepped up their campaign for a management reshuffle by insisting that the board appoints a full-time chairman rather than a non-executive one.
A number of Rentokil's big shareholders, who have seen their shares slashed from 172p in October to 82p, approached the company's senior independent director, Peter Long, last week. They are demanding that Mr Long, who is in charge of the nominations committee, ask the company's headhunters to change their brief to recruit a strong executive chairman capable of putting through the big changes necessary to turn the company around. Several senior industrialists have been approached but so far they have turned down the opportunity because they fear there may be even greater problems.
Rentokil's shareholders have already demanded the head of chief executive Doug Flynn, who they blame for the current turmoil exacerbated by the profits warning issued two weeks ago, the second in many months. But Mr Flynn has refused to go, arguing that he will stay until a new chairman and board are in place to make a decision.
Sources close to Rentokil would not comment on the latest move by investors, but said that Mr Flynn was still adamant he would stay on.
The company is looking for a new chairman following the news last month that Brian McGowan, who has been on the board for 11 years as a director and four as a non-executive chairman, will retire in May.
Rentokil, which employs 79,000 people in 49 countries, is one of the biggest business services companies in the world, ranging from the eponymous pest-control operations to cleaning, washroom services and the City Link parcels business which may not break even in 2008. Mr Flynn, who joined in 2005, has been critical of previous management.
Big investors include: Scottish Widows, Barclays, the BT pension fund, Schroders, Fidel-ity and Franklin Templeton. Some reckon the best option now is for a break-up or sale.Reuse content