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Revolt of the M&S faithful as Rose is attacked at hostile AGM
Jonathan Prynn and Simon English9 Jul 2008
Marks & Spencer boss Sir Stuart Rose was hit by a major City revolt today.
At a hostile AGM, a quarter of shareholders refused to back his appointment as chairman, which he has combined with his present role as chief executive.
In a vote at the meeting 22 per cent either voted against combining the roles or abstained in a move seen as a serious challenge to Sir Stuart's authority.
The embattled M&S boss was forced to use all his famous charm to prevent an even more damaging rebellion from shareholders alarmed by his dominance of the boardroom and the recent dismal financial performance of the chain.
In his address to shareholders at the Royal Festival Hall on the South Bank Sir Stuart passionately defended combining the roles, which is strictly contrary to City best-practice guidelines.
He denied that it made him too powerful. Sir Stuart, who appeared uncharacteristically nervous, told shareholders that the company was "bigger than any individual" and that the non-executive directors kept him on his toes. He added: "I fully expect to be held accountable for the actions that I take."
Sir Stuart told the 2,000 shareholders that M&S would still be around in 100 years.
The first heckle of the meeting, a cry of "rubbish", came when Sir Stuart said customers supported the decision to start charging for plastic bags. Sir Stuart was supported by deputy chairman Sir David Michels who said the board was "entirely convinced" the dual role was right for the company.
Sir David said: "He unquestionably has the right set of skills to take Marks & Spencer forward and complete the job he has started."
But the scale of the rebellion is a huge blow to the already diminished authority of a company boss who only six months ago enjoyed an unassailable position as the saviour of Britain's best-loved retailer.
He was credited with turning around a failing business, saving it from the clutches of bidder Sir Philip Green and delivering the highest profits - just over £1 billion - for a decade.
However, his reputation has been on the slide since the announcement in March that he would become executive chairman, combining the two top boardroom roles when Lord Burns stepped down as chairman.
Powerful City institutions such as Legal & General and Schroders said they disapproved of the plan and the Association of British Insurers demanded an explanation.
In April a new corporate governance row erupted when it emerged that Sir Stuart has invested in Lucky Voice, a karaoke business set up by Martha Lane Fox, a non-executive director of M&S.
But last week another bombshell hit M&S when it was revealed that sales have slumped five per cent in the past three months.
Sir Stuart sacked his food boss Steve Esom and blamed a deterioration in consumer confidence for the slide.
