SHL directors turn on each other in boardroom row

An almighty boardroom bust-up has erupted at SHL, a psychometric testing company, as two camps, involving five directors, tried to oust each other.

Three non-executive directors told the company on Thursday that they were requisitioning an extraordinary general meeting to remove Neville Bain, the chairman, and John Bateson, the chief executive. The move was a reaction to a board meeting on Monday when the resignations of these three rebels were demanded by the rest of the board.

The rebels are Roger Holdsworth and Peter Saville, co-founders of the company, and David Arkless, a representative of the 7 per cent shareholder Manpower. The trio have refused to quit. SHL said it had "lost confidence" in the three non-executives and it had the support of 26 per cent of the institutional shareholders for its stance.

Mr Bain, a former chief executive of Coats Viyella and the ex-chairman of the Post Office, said: "If they don't resign, we'll have to call an EGM.... Over the last few months, it has become increasingly difficult to work constructively with them."

Industry sources said that Mr Saville, who holds 11 per cent of the company, and Mr Holdsworth, who has 2 per cent (having sold down his stake), have found it hard to "let go" of the reins of the business. Both psychologists, they came up with the tests that the company uses.

The tests are used both in recruitment and for existing staff, to assess the individual's strengths and weaknesses.

One of the areas they are thought to have clashed over with Mr Bateson, who is not a psychologist, is the company's internet strategy. Mr Bateson was brought in as a professional manager two years ago to replace Mr Holdsworth, a change he was never entirely happy with, insiders said.

Mr Bain said: "There is not one substantive issue [of disagreement]. We have lost confidence in their ability to work to deliver the strategy that we all agreed on."

Mr Holdsworth had initially agreed to resign, some six weeks ago, before changing his mind at this week's board meeting.

Mr Arkless has now quit. SHL reported a loss of £1.8m, for the year ended 30 September, from pre-tax profits of £8.0m last year.