View from City Road: Unpopular move at Wellcome

It is perhaps fortunate that Wellcome chose Sir Anthony Tennant as its deputy chairman. After years of shrugging off criticism of his combined chairman and chief executive role at Guinness, he is hardly likely to quibble now that the drugs company has decided to give John Robb the chairman's job in addition to his chief executive post.

Shareholders, however, have no such qualms. A number of institutions have already expressed their displeasure to the Wellcome board. Standard Life has gone further; it wants assurances that the roles will be split again as soon as possible.

It is likely to be disappointed. Mr Robb is still four years from retirement and shows no sign of wishing to give up as chief executive. Equally, however, he is unlikely to want to revert to working under an outside chairman, having just won the top post.

Wellcome is not breaking any rules. The Cadbury guidelines do recommend splitting the roles, but they also accept that strong non- executives - Wellcome has five, including Sir Anthony - can provide adequate checks and balances. Wellcome chose the latter route when an exhaustive search, in the six months since the late Sir Alistair Frame retired, failed to find a suitable outsider.

The company is, however, ignoring the spirit of the legislation, and the preferences of many of its shareholders. Wellcome agreed with them as recently as three months ago. Its 1993 annual report states: 'The company remains committed to the principle of split roles and is actively seeking to appoint a chairman as soon as possible.'

Mr Robb is undoubtedly a very able manager who has improved the company dramatically since he became chief executive in 1990, when the top roles were split. It is a pity he should spoil that record by taking such a retrograde step.