Morrison heads off revolt by hiring first non-execs

WM Morrison made a rare concession to the corporate governance lobby yesterday when it announced the long-awaited appointment of two non-executive directors.

WM Morrison made a rare concession to the corporate governance lobby yesterday when it announced the long-awaited appointment of two non-executive directors.

David Jones, who chairs the retail group Next, and Duncan Davidson, the chairman of Persimmon, the housebuilder, will join the board of the Bradford-based supermarket chain next Friday, following their election at its annual meeting.

Morrisons' move heads off a potential showdown at next Thursday's meeting, the first since its £3bn acquisition of Safeway. It also ends its infamous position as the FTSE 100's only company not to have any independent directors. Just hours before the announcement, Pirc, the pension fund consultant, signalled Morrisons' continuing lack of non-executive directors as a concern.

Although Morrisons' climb-down was welcomed by the corporate governance lobby, the presence of just two non-executive directors means it still falls far short of the Higgs code on best boardroom behaviour.

The influential Association of British Insurers called for Morrisons to continue its search for more independent directors. "Morrisons has been a very successful company, but it has reached a size where strategic decisions are more complex and it is operating in a challenging sector," an ABI spokesman said. "A further appointment would take them usefully in the direction of meeting the provisions of the new Higgs Code."

And the National Association of Pension Funds called for Morrisons to establish "formal board committees". At present, it lacks both remuneration and audit committees, and its nominations committee - which will appoint the eventual successor to Sir Ken Morrison, the chairman - is made up of executives. Sir Ken, who wants his son to succeed him, has contended that independent directors are a waste of money. He said: "For the price of a non-executive I can get two checkout girls and that's money well spent."

Yesterday he said he was "extremely pleased" to welcome his recruits. "Both have a wealth of experience and talent and a complete understanding of the culture so strong at Morrisons. I am confident their knowledge will benefit our business."

Mr Jones, 61, clocked up 25 years in mail-order before joining Next as chief executive in 1988. He transformed Next, which he has chaired since 2002, from a jumble of businesses into one of the high street's best clothing retailers. Mr Davidson, 62, founded Persimmon in 1972, building it up into Britain's biggest housebuilder.

It will be impossible to judge whether the pair bring more value than extra staff in one of the company's supermarkets, since it declined to say how much they will be paid. "This is Morrisons. We expect good value," a spokesman said.