Stagecoach, the troubled bus and coach operator, announced yesterday that its multi-millionaire co-founder, Ann Gloag is to quit her executive position at the group.
The news came as the company courted further controversy in the City when it promoted an internal candidate to the position of finance director. The decision to appoint Martin Griffiths, Stagecoach's 34-year-old business development director to the job raises further questions over corporate governance at Stagecoach, which has been hit by a string of boardroom departures and a profits warning this month.
"If ever there was a model for destroying credibility, this company has followed it to the letter," one analyst said.
Analysts said this move was of greater significance than Mrs Gloag's decision to take more of a back seat. Mrs Gloag, one of Britain's wealthiest businesswomen, helped found Stagecoach 20 years ago with her brother Brian Souter, the company's chairman. Mrs Gloag, a former nurse and Mr Souter, a former bus driver, used £25,000 of their father's redundancy money to start the company. From their humble roots in a Perth council house, they built a business which now has interests around the world. They became Scotland's first half billionaires when Stagecoach floated in 1983.
Mrs Gloag's day-to-day involvement has been declining in recent months and her family was hit by tragedy last year when her 28-year-old son committed suicide. She has been in charge of Stagecoach's property interests which include bus and coach stations as well as Prestwick airport.
Mrs Gloag will give up her executive post on 1 May but remain a non-executive director. She intends to spend more time on her charity work. She retains a near 10 per cent stake in Stagecoach.
Mr Griffiths will become finance director with immediate effect. He replaces Keith Cochrane who became chief executive last month following the shock resignation of Mike Kinski. The failure to appoint an external candidate as finance director fuels City concerns over the company's approach to corporate governance. It follows the departure of Jim Leng who quit as a non-executive director last Thursday, only three months after being appointed.
One analyst described Mr Griffiths promotion as "a further closing of the ranks" and "a worrying development". However, Stagecoach says it considered external and internal candidates for the job and the board was unanimous in its view that Mr Griffiths was the best.
Stagecoach shares plunged earlier this month when it said rising cost pressures in its UK and US bus operations would hit profits next year. The news was accompanied by the £1.4bn sale of its Porterbrook leasing operation to Abbey National and a pledge to return £250m to shareholders.
The shares closed 0.5p lower at 64p yesterday. They stood at 232p last June.
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