Shareholders set to grill Liberty board

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The Independent Online
THE BOARD of Liberty, the struggling department store group, is braced for a stormy annual meeting today as shareholders grill the directors over the company's collapsing share price, suspended dividend and boardroom upheaval. The company will also be forced to admit that it has breached corporate governance guidelines.

Corporate governance specialists have criticised the company over the length of certain directors' contracts and the decision to appoint one of its non-executive directors as its company secretary.

Non-executives are supposed to be independent, while the company secretary is more closely involved with day-to-day matters such as legal advice and corporate governance best practice.

The current company secretary is Odile Griffith, the financial adviser to the founding Stewart Liberty family. She was appointed to the board after the bitter boardroom dispute which led to a complete clearout of the previous executive team, including chairman Denis Cassidy.

Liberty admits that it has been contacted by the Association of British Insurers and the Institute of Chartered Secretaries over the situation. Brian Muirhead, the finance director, has said that the situation is temporary and that he will take on the company secretary functions.

On directors' contracts, Michelle Jobling, the new managing director, is on an 18-month rolling contract. Liberty claims this is not excessive, although contracts of one year are considered to be best practice.

The board also has only one non-executive director - Odile Griffith - instead of the recommended three non-execs.

Liberty is holding its annual meeting in the coffee shop of the flagship store on London's Regent Street. After a year of continual upheaval, the board is expecting a rough ride.

Mr Muirhead said: "It is not going to be a happy shareholder gathering. We are expecting it to be lengthy and shareholders are entitled to ask questions about the year's events."

Liberty reported an pounds 11.5m loss last month and has seen its shares lose almost half their value since October last year.

It is due to complete its strategic review in September. It is looking at a financial restructuring which could include a rights issue or the sale and leaseback of the Regent Street store's freehold.