Evans stays as chairman in BAE boardroom shake-up

BAE Systems unveiled a boardroom shake-up yesterday but said its chairman Sir Dick Evans would remain in his post for a further year despite reports of shareholder unrest over his stewardship of Britain's biggest defence company.

Sir Dick, who has been with BAE for 34 years, the last five as chairman, will step down at next year's annual meeting. Sir Peter Mason, BAE's new senior independent director, will lead the search for a successor.

News of the boardroom changes came as BAE reported a £616m pre-tax loss for 2002 after taking a £750m charge to cover cost and time overruns on the Nimrod surveillance aircraft and Astute nuclear submarine programmes.

Mike Turner, the chief executive, said BAE would look internally and externally for a new chairman and did not rule out an existing board member being given the job. However, the City is almost certain to want fresh blood from outside after two calamitous profits warnings which have wiped 70 per cent off BAE's share price in the past 12 months.

Sir Peter, the chief executive of the construction group Amec, replaces Sir Robin Biggam, who was last week forced to issue a public statement to quell rumours that, as senior independent director, he was leading a boardroom coup against Sir Dick and Mr Turner.

Also retiring from the board are the vice-chairman, Sir Charles Masefield, and another non-executive, Keith Brown. BAE said it was also looking for a new non-executive director to chair its audit committee.

BAE had pledged to increase profits from this year onwards after earlier setbacks on big equipment programmes but yesterday it said it now expected earnings this year to be flat compared with last year's £796m profit before goodwill and exceptional charges.

Mr Turner said a lot would depend on the timing of a second tranche of orders for 236 Eurofighter Typhoon aircraft in addition to the 148 it is already building.

After the fiascos of Nimrod and Astute, Mr Turner said BAE would never again take on a fixed-price contract of that nature from the Ministry of Defence.