Growing shareholder revolt corners Morrison chairman

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The Independent Online

Pressure is growing on Sir Ken Morrison, the chairman of the Wm Morrison supermarket group, to lessen his grip on the board after the Association of British Insurers (ABI) joined the shareholder revolt against the management of the ailing company.

Pressure is growing on Sir Ken Morrison, the chairman of the Wm Morrison supermarket group, to lessen his grip on the board after the Association of British Insurers (ABI) joined the shareholder revolt against the management of the ailing company.

Sir Ken is now heading for a stormy annual meeting on 26 May, with shareholders still reeling from last week's shock profits warning. The company said on Friday that soaring costs meant operating margins would be significantly down on last year.

The ABI, one of the most powerful shareholder bodies in the City, whose members' interests account for about 20 per cent of the London stock market, has issued a "red-top" warning against the company before the annual meeting. A spokesman for the ABI said yesterday: "We issue a red-top warning when we have very serious concerns about corporate governance standards in a company. We believe the Morrisons board falls short of accepted corporate governance practices." He added that the ABI was concerned there was only one non-executive on the company's board.

The warning to shareholders from the ABI follows a similar stance by the National Association of Pension Funds. On Friday, it urged shareholders to vote against re-electing Sir Ken as chairman at the annual meeting. It, too, is concerned about Sir Ken's "unfettered powers" and the presence of executive directors on the board's remuneration, audit and nomination committees.

Last week was the fourth time in less than a year that the company has warned on profits in connection with the £3.3bn Safeway acquisition. Some shareholders have been calling on Sir Ken, 72, to step down as soon as possible and let someone else come in to turn around the group's performance.

But while the company has told shareholders it is working on a succession plan to eventually replace Sir Ken, it is understood that he is reluctant to give up the reins until the Safeway chain has been fully integrated in to the group. It is understood, however, that Sir Ken will try to stave off some of the shareholder revolt next week by announcing the appointment of more non-executive directors at the meeting.

The company is also still looking for a finance director, after it sacked Martin Ackroyd in a boardroom shake-up in March. As part of the reshuffle, Bob Stott was promoted to chief executive from joint managing director.

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