UK: M&S combined roles opposed by public pension funds
Retailer Marks & Spencer risks "continuing downhill from its current shaky position" if it does not separate the roles of chairman and chief executive, according to an association of public sector pension funds.
The Local Authority Pension Fund Forum (LAPFF), a group of 48 public sector pension funds with GBP95bn (US$135bn) in assets, is to table a resolution calling for the separation of the roles at the company's next AGM in July.
The appointment of Sir Stuart Rose as executive chairman in March 2008 was opposed by 22% of shareholders, who pointed out that UK corporate governance best practice advised against combining the roles of chairman and chief executive, also stating that a chief executive should not go on to become chairman of the same company.
However, Marks & Spencer has stood firm against the criticism, justifying the action by arguing that Sir Stuart is best-placed to lead the company through the current economic downturn.
LAPFF chair Ian Greenwood said: "As a representative body of large institutional investors in Marks & Spencer, the Forum believes that the risk of the company continuing downhill from its current shaky position has been increased as a result of the combined roles. All this takes place in an unfavourable retail market environment."
An M&S spokesperson said the company was "disappointed" to have received notice of the LAPFF's resolution, but welcomed its continued confidence in Sir Stuart's leadership.
She added: "The Marks & Spencer board is fully aware of its obligations and believes that the appropriate succession timetable is in place, and that it has the right leadership to take the company through this period."
M&S is due to release a trading update on its fourth quarter tomorrow (31 March).
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