Vodafone board shake-up raises pressure on Sarin

Click to follow
The Independent Online

Vodafone announced the retirement yesterday of its deputy chief executive Sir Julian Horn-Smith, a co-founder who is seen as a key architect of the global strategy at the mobile phone giant that has come under fire from investors.

At the same time, in a possible concession to concerned shareholders, the company reported that Tony Watson, a former city fund manager, would join its board. Mr Watson was, until recently, the chief executive of the activist fund management group Hermes. He has a long pedigree in the City and was chief international investment officer at Citicorp Investment Management from 1991, before joining Hermes in 1998.

Investors, led by Standard Life, have questioned the logic of Vodafone's global approach, which the company argues has created economies of scale. Shareholders have asked whether it makes sense for Vodafone to have major interests in the US and Japan, where it must work to different technical or standards or consumer demands, so reducing the scale of opportunities available. Sir John Bond, a board member at Vodafone, will take over aschairman this year.

Some commentators suggested that the board moves announced yesterday would further weaken the position of Vodafone's chief executive, Arun Sarin. However, the company was quick to dismiss any connection between changes at the board and shareholder criticism. A spokesman conceded that the appointment of Mr Watson did "provide a viewpoint that we didn't have before". But he added: "Sir Julian will be on the board until the end of July. His retirement should not be seen in any other context than the end of a spectacular career at Vodafone."

Sir Julian, 57, has been at the company for more than 22 years. His two other co-founders, Chris Gent, the former chief executive, left in 2003, while the former finance director Ken Hydon stepped down last year.

Sir Julian was closely involved in all of Vodafone's major acquisitions, most notably its hostile takeover of Germany's Mannesmann in 2000. More recently, he was involved in the acquisitions of businesses in the Czech Republic and Romania.

Comments