Marks & Spencer faces tough search for chairman acceptable to the City
Room at the top: Limited pool of non-executive talent hinders FTSE 100 heavyweights filling the top job
Monday 10 May 2004
Marks & Spencer is believed to have held talks with Archie Norman, the man credited with turning around Asda, over the post of chairman at the beleaguered high street retailer.
The group is also set to consider David Varney, the outgoing chairman of mmO2, as a replacement for Luc Vandevelde. Other names in the frame include Stuart Rose, the former chief executive of the Topshop and Burton retail group Arcadia, and Paul Myners, who is already an M&S non-executive.
M&S has commenced the search for a new chairman with a view to making an appointment before the company's annual meeting in July, to head off a damaging confrontation with its army of small shareholders. According to reports at the weekend, the City headhunter Russell Reynolds has won the mandate.
An announcement to confirm the departure of Mr Vandevelde is expected this week, but the search is understood to have been in train for several weeks.
The task is especially difficult because a string of FTSE 100 heavyweights are seeking a new chairman, at a time when non-executive talent is increasingly concerned about the legal liabilities that now accompany such a job.
Many of the names being tipped have problems. Mr Norman, a former Conservative party chairman, is still a Member of Parliament and is heavily involved in the turnaround at Energis, the private telecoms group he chairs. After having forced the resignation of Mr Vandevelde on the grounds that he is spending too much time on his other directorships and private equity interests, the City is unlikely to find Mr Norman acceptable unless he quits Parliament. He is believed to have been considered for the chairmanship in 2000.
Mr Rose has told friends he would love to join M&S, although he is likely to want to persuade the company to take him on as an executive chairman - something which may not be acceptable to the board.
If the company opts to look outside the retail industry, it would be a dramatic departure. Mr Vandevelde was the first chairman not to have risen through the ranks of the organisation itself, but he arrived in 2000 from Promodes, the French supermarket chain.
Mr Varney, who steps down as chairman of the mobile phone group mmO2 in July, is said to be a close associate of Paul Myners, the former head of Gartmore fund managers, who himself could be a candidate. City observers worried, however, that a non-retailing appointment would worsen the perception that M&S's top executive team is light on retail talent, especially in women's clothing, where M&S is losing market share.
Paul Smiddy, at Robert W Baird, said: "There are no obvious answers. If M&S goes for a typical old school tie FTSE 100 chairman, then it will remain a challenging task for them to show that they can demonstrate prowess in clothing, although he might take a different view of the competence of the current management and make changes."
The arrival of a new chairman is likely to increase the pressure on Roger Holmes, the chief executive, to find a speedy way out of M&S's current difficulties. A former management consultant, he has been criticised for taking a gradualist approach to changing the culture of the company. Those close to Mr Holmes, however, believe he would benefit from the support of a strong independent chairman. One source said: "M&S could benefit from someone saying they have looked at the company, examined the strategy, seen the management team."
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