WH Smith `drift' worries investors

Several institutional shareholders in W H Smith are becoming impatient over the company's failure to appoint a chief executive to replace Bill Cockburn, whose shock decision to quit after just 18 months in the post was announced six weeks ago. They are worried about a period of ``drift'' at the company, which is facing serious problems in its core business and are keen for an appointment to be made as soon as possible.

One shareholder said the lack of progress was a ``concern'' and that the lack of direction at the top ``cannot be doing the business any favours''. However, another shareholder was more supportive saying: "If a chief executive leaves out of the blue it isn't easy to get an instant replacement."

It is understood that WH Smith will not make an announcement about a new chief executive until after it reports its full-year results on 27 August. Though Mr Cockburn is not due to leave the company until October, when he takes up his position as head of BT's UK business, he will not present the figures and is seen within Smith's as a ``lame duck'' leader.

The effects of the lack of strategic direction at the top are thought to be most serious at the core WH Smith high-street business, where Mr Cockburn had appointed himself chairman and was concentrating his energies.

There are four internal candidates for the position: Keith Hamill, the finance director; John Hancock who runs the US operations; Richard Handover, head of the news distribution business; and Alan Giles, who runs the Waterstones bookstores group. Spencer Stuart, the headhunters have been appointed to identify the best candidate and external names in the running include Stuart Rose, the former Burton director.

There have been concerns that the long list of internal candidates is encouraging factions to form.

Jeremy Hardie, W H Smith's part-time chairman, is spending more time at the company and the group is keen to play down suggestions that it is struggling to fill the role.

Keith Hammil, seen by many as the leading internal candidate, is thought to favour breaking the company up. Alan Giles is understood to favour keeping the group together, as is Richard Handover.