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Marks & Spencer took the highly unusual step this evening of making public a letter it has sent to investors as it tries to justify Sir Stuart Rose's appointment as executive chairman.
The six-page letter from Lord Burns, the outgoing chairman, seeks to explain why the board felt it so necessary to retain Rose even at the risk of breaking corporate governance guidelines.
It seeks to portray M&S as a company that was under attack when Rose arrived in 2004 as chief executive and has since enjoyed a complete turnaround, claiming that finding a successor for the man chiefly responsible was not top priority.
The letter argues that Rose leaving next year as expected would be a bigger problem than him being seen as having too much power.
Lord Burns writes: "It became apparent to the board that, whilst a strong team had been assembled, none of these individuals would be ready to assume the role of chief executive by 2009."
Earlier M&S won rare support from the City for its move when Neil Woodford, the head of investment at Invesco Perpetual, broke ranks with rivals at other institutions to come out in support of the plan.
Until now, it seemed highly possible M&S would mount an embarrassing climbdown, possibly resulting in the departure of Sir Stuart. Investors led by Legal & General and Schroders baulked at the plan, which they saw as giving Rose too much power. It is also in breach of corporate governance guidelines.
Woodford, who oversees funds of £15 billion, is a highly regarded "value" investor who has won plaudits for resisting investment fads.
He called the M&S shake-up "entirely appropriate", saying: "It is especially important to create an executive structure that maintains Stuart's leadership of the business, but also enables him to bring on successor talent such that, at the appropriate time, he can step down. In the current environment particularly, this has to be the right commercial decision for the company and its shareholders."
