Lindsay Owen-Jones, the long-standing British boss of L'Oréal, is to hand over executive control of the French cosmetics giant in a move that will split the roles of chairman and chief executive for the first time in almost two decades.
The group announced yesterday that Jean-Paul Agon, 48, who runs its US division, would succeed Mr Owen-Jones as chief executive in April 2006, leaving his predecessor to become the company's chairman.
L'Oréal's decision comes one week after the Anglo-Dutch consumer group, Unilever, confirmed its plans to adopt a conventional corporate governance structure by separating its co-chairmen's roles.
But the French company, which owns brands such as Lancôme make-up and Fructis shampoo, stopped short of promising to maintain the separate roles once Mr Owen-Jones retires. The announcement capped a momentous year for L'Oréal, which saw the founding Bettencourt family give up 95 years of control. The Bettencouts - France's richest family - remain the group's biggest shareholder, with a 27.5 per cent stake, while Nestlé, the Swiss food group, has 26.4 per cent.
Mr Owen-Jones, 58, said he would take a non-executive role, handing full operational responsibility to M. Agon. "You can't have two people with their hands on the steering wheel," he said, adding that he hoped the move would be short-term. "I'm in favour of having the two function rooms, although I know the trend is towards separation."
During the 20 years that Mr Owen-Jones, a L'Oréal "lifer", has been at the helm he has transformed the company by expanding away from its haircare heritage and into the higher margins cosmetics and skincare markets. Since the group's $600m (£317m) acquisition of Maybelline in 1996, its US turnover has quadrupled to about $4bn. He has expanded into emerging markets such as China, Brazil and India: 23.4 per cent of the group's sales last year came from outside North America, Western Europe and Japan - and the target is 30 per cent by 2010.
Yesterday, the company notched up its 20th consecutive year of profit growth, reporting a 10.3 per cent increase in pre-tax profits to €2.06bn (£1.57bn).
Several analysts said the bottom-line progress came only at the expense of the company's advertising budget, which fell during its fourth quarter after it launched fewer perfumes. It masked a slowdown in underlining sales growth after a sluggish second half.
On a reported basis, sales in Western Europe rose by just 1.1 per cent, while the impact of the weaker dollar meant they fell in North America.