View from City Road: Clements will need better luck

TRAFALGAR HOUSE has moved quickly to satisfy shareholder unhappiness over the continued role of Sir Nigel Broackes as chairman and Sir Eric Parker as chief executive. It is expected to announce today that they will both step down.

It is pity that the company has not had time to cast its net more widely in its search for a new chairman. Alan Clements may have an excellent reputation as a former finance director of ICI but his record as a non-executive director of other companies has been tinged with disaster.

The Clements index, a creation of our own, has underperformed the rest of the market by 33 per cent, although this outcome may owe more to bad luck than to bad judgement.

The index reflects the relative performance of shares in Granada (plus 58 per cent), David S Smith (minus 9 per cent), Mirror Group Newspapers (minus 52 per cent), Brent Walker (minus 94 per cent) and Trafalgar House (minus 70 per cent) since he joined their boards.

He has also been a director of Guinness Mahon and the Smaller Companies Investment Trust.

Trafalgar argues that it needs someone who knows the company well in view of the sudden departure of the founding directors, and Mr Clements has been on the board since 1980. Allan Gormley, who is expected to become chief executive, is also well versed in Trafalgar's business.

The trouble is shareholders who wanted Sir Nigel Broackes out can hardly complain. They can only hope that Mr Clements' fortunes pick up.