Sir Ken to loosen grip on Morrisons

Wm Morrison scored a rare corporate governance victory yesterday when an influential advisory body revoked an earlier call for investors to vote Sir Ken Morrison off the board.

Wm Morrison scored a rare corporate governance victory yesterday when an influential advisory body revoked an earlier call for investors to vote Sir Ken Morrison off the board.

For the first time in its history, the supermarket group took the initiative, pledging to comply with the City code on corporate governance in an attempt to avert a shareholder revolt.

RREV, an offshoot of the National Association of Pension Funds, swung behind Sir Ken's re-election after the company spelt out just how the chairman intended to loosen his iron grip on the company his father founded 106 years ago.

In a telephone conference, Morrisons told RREV that Sir Ken intended to hand his executive responsibilities over to Bob Stott, the newly appointed chief executive "over the coming months". The embattled supermarket group also gave the first concrete sign that it knew that like its produce, its chairman had a shelf life.

The Bradford-based company, which has enjoyed the notoriety of having the most recalcitrant boardroom in the FTSE 100, has promised to appoint four more independent directors with an eye to charging one of its new appointments to succeed Sir Ken. The move will give it a majority of non-executive versus executive directors, in line with the Higgs recommendations.

Tim Sawyer, the chief executive of Research Recommendations Electronic Voting, hailed Morrisons' move as a "sea change in attitude". He said: "They are facing up to the face that Sir Ken must move on. It's a good day for them and for us because they are now prepared to talk to shareholders about how they run their board. It's a seismic shift that they are adopting best practice in corporate governance."

Sir Ken also promised to step down from the company's new audit and remuneration committees as soon as the company has bulked up its board. Morrisons hopes to announce two of the appointments at its annual meeting next week.

The breakthrough came on Monday when Morrisons took the unprecedented step of contacting RREV to discuss the issues it had raised when it urged shareholders not to re-elect Sir Ken last week. At the time, RREV had criticised Sir Ken's "unfettered powers of decision".

Mr Stott and Jonathan Burke, the company secretary, spent over an hour with Mr Sawyer over the telephone. They did not manage to persuade RREV to switch its recommendation that shareholders reject Morrisons' remuneration report.