GOVERNANCE B........S.
Recent research reveals that many directors of large quoted companies believe that the whole governance infrastructure has gone way over the top and that relatively straightforward matters of probity which ought to be subject to effective routine procedures have become blown out of all proportion. They see governance and political correctness deflecting boards from their central role of determining companies' strategies.
Additionally, it seems that political correctness has replaced practical common sense when it comes to deciding on such matters as who should be chairman. Common sense says that the chairman's role and skills will depend on circumstances and that provided that the chairman can help, challenge and in extremis, remove the chief executive, the absolute key is that the two can work effectively together and bring their complementary skills to bear for the benefit of the company.
So, why should the fact that Paul Myners and Stuart Rose of M&S seem to get on well together be a source of disquiet rather than celebration? The key relationship in any board is that between the CEO and the chair. But it seems that this is not good news to several M&S directors, despite the fact that Myners seems to have proven to be a strong and excellent chair so far.
The M&S board has therefore decided to replace Myners by Lord Burns.
Here are two quotes from Investors. First Guy Jubb of Standard Life:
The directors, executive and non-executive, must now demonstrate a united commitment to provide entrepreneurial leadership.... to enable Marks and Spencer to realise its full potential.
Were not the two key actors doing that already? Weren't Myners and Rose working well together - are both of them not men of integrity? What was all the fuss about? If Kevin Lomax, senior non-executive director, who apparently thought that Myners and Rose were 'too close', which in a sane world might be seen as a good thing, didn't like the good relationship, should he have not been thrown out for disrupting a constructive team?
The second quote is from Richard Singleton, director of corporate governance at F&C Asset Management:
Terry Burns has huge experience, particularly of significantly larger organisations like the civil service. He will be able to look at the business with fresh eyes.
The Civil Service?? Fresh eyes?? It might seem to those who do not occupy the strange universe of corporate governance that Myners who was beginning to build a useful store of knowledge about M&S and retailing, might have been just the man for the job. 'Fresh experience' from the Civil Service seems a little disruptive and irrelevant. It all seems a little like political reshuffles, in which ministers are moved just as they were beginning to understand their jobs. Bad thing, knowing what you are doing, might get too close to the portfolio.......
Or are we missing something?
