Concern as Sir Brian Souter steps up to chair Stagecoach

 

Fresh from the disappointment of losing its joint venture with Virgin to run the West Coast Mainline, train and bus operator Stagecoach is courting more controversy by promoting its chief executive to the chairman's job.

Sir Brian Souter, no stranger to controversy in Scottish politics, took on corporate governance custodians by announcing he is stepping from chief executive to chairman at Stagecoach, which he founded more than 30 years ago and in which his family holds a 25 per cent stake.

"We will take some convincing that this is a good move," a spokesman for shareholder advisory group Pirc said. "The idea within the corporate governance code is to prevent backseat driving by the former chief executive when they move to chairman. The new chief executive must be able to pursue their own strategy."

Sir Brian, 58, will take over from Sir George Mathewson, 72, as chairman next May. He will be replaced by the current finance director, Martin Griffiths, 46, who in turn will be succeeded by director of finance and company secretary Ross Paterson, 41.

Sir Brian said: "I remain committed to the success of Stagecoach and consider now to be an appropriate time to plan to take a step back from the day-to-day management of the business.

"With a combined shareholding of over 25 per cent, my family and I remain committed shareholders in Stagecoach and I will devote whatever time is necessary to effectively discharge my responsibilities as chairman when that time comes."

Stagecoach acknowledged it was in breach of the UK corporate governance code recommendations that the chief executive of a company should not become its chairman. It said its board "believes that retaining the talent and knowledge of Sir Brian in the role of chairman will be to the benefit of the company and all its shareholders".

Stagecoach added that Gary Watts, the former chief executive of SSL International and senior non-executive director, would become deputy chairman.

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