Blog: Rose rises to executive chair
Leonie Barrie | 11 March 2008
While news of the shake-up at M&S had a negligible effect on share price yesterday, it does at least clear up one of the biggest issues the retailer had been facing: what happens beyond 2009, when boss Sir Stuart Rose was due to step down.
Well now we know that he’s going to be around for another two years after this date, albeit stepping up to the role of executive chairman.
Whether this is the end of the matter, though, is unlikely. Rose's move defies the Combined Code on corporate governance, which recommends companies avoid promoting a chief executive to the post of chairman.
And it has already raised concerns at the retailer’s second-largest shareholder, Legal & General, which admits it is worried about the decision to put too much power in one man's hands.
But what it does do is give M&S some much needed breathing space. It not only builds in another three years to find a successor to Sir Stuart, but also gives him more time to get the business back on track and ensure M&S’ big push overseas is well underway.
After making substantial progress to revitalise the retailer since his appointment in 2004, growth has slowed in the last few months, with Rose warning that tough trading conditions are likely to persist in 2008. There’s no doubt he’d like to go out on a high and this goal is now back within reach.
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