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Not just any mess, an M&S mess

Robert Peston | 11:24 UK time, Tuesday, 7 July 2009

There has barely been a moment in the past 12 years or so when Marks & Spencer hasn't been in some kind of boardroom crisis.

From Greenbury, to Salsbury, to Vandevelde, to Holmes, to Myners, to Burns, and finally Rose, this company seems to find it impossible to pick chairmen or chief executives without sparking controversy and alienating important groups of shareholders.

M&S storeIf Harvard Business School wants to do a case study of how not to do succession planning, Marks would be it. How different from all those decades when Marks was the definitive Harvard case study of how to run a retailer.

I used to think M&S governance difficulties stemmed largely from the painful transition it made more than 25 years ago from being a family-controlled business into a mainstream, institutionally owned company.

Now I just fear that the directors have been cursed by a witch who was refused a refund on saturnine underwear.

Anyway M&S went against corporate governance best practice in 2008 (for at least the third time in a decade) when Stuart Rose added the responsibilities of being chairman to his existing role as chief executive.

The board felt that was the best way of preparing for his eventual departure. Many shareholders disagreed.

More than a year later the tension between the owners and the managers is coming to a head in a vote at tomorrow's annual meeting.

A resolution requisitioned by the Local Authority Pension Fund Forum calls on the company to appoint a new independent chairman by July 2010.

To employ the kind of language that was current in the City when I became a journalist in the early 1980s, this represents a discourteous gesture against Stuart Rose - since he is planning to retire in July 2011.

Stuart RoseIn the event that most shareholders were to vote for the LAPFF motion, Rose would almost certainly feel he had to quit now, because the owners would be pronouncing a negative judgement on his leadership of the group.

He wouldn't be legally obliged to go, because the vote is - apparently - not binding on the board. But it's simply impossible for any executive to stay in place when he or she has lost the confidence of the owners.

And if Rose himself weren't minded to go (but he's a proud man, and I'm sure he wouldn't cling on), the non-executives couldn't ignore the revealed preference of the owners. They would have to ease him out.

Two questions follow.

Would shareholders be well served by the premature departure of Rose?

And how likely is it that a majority of them will back the LAPFF resolution?

Ejecting Rose now doesn't look an especially rational thing to do.

First, very few shareholders would argue that he's been a failure. He's had his ups and downs since becoming chief executive in 2004, but most would say M&S is stronger for his tenure. And the last set of figures indicated that the business may be over the worst of the current recession.

Also it's worth investors dwelling for a second on quite how dark a place the business was in before he arrived.

If he were to go now, the UK's largest clothing retailer would be rudderless for an indeterminate period.

By contrast, M&S has promised to find a new rudder - a new chief executive - in an orderly fashion next year.

So it is possible to characterise the LAPFF position as a preference for finding a chief executive in panicky hurry rather than in a methodical and sensible fashion (the LAPFF would of course say that it wouldn't want Rose to evacuate the building immediately).

Which brings us to the question of how investors will vote when it comes to it.

Well, there's bound to be a significant vote in favour of the LAPFF motion.

But I suspect it won't quite get a majority.

What will then be intriguing and important is how many abstentions there are and how the non-executives interpret those abstentions - whether they deem them as irrelevant or as de facto votes of no confidence in Rose.

From what I can gather, the non-execs will rally round Rose so long as the LAPFF doesn't win.

But that is what Margaret Thatcher expected her cabinet colleagues to do after she won her indecisive victory in the first round of voting in the 1990 election for leadership of the Tory party. And something quite different happened.

To coin that awful cliche, this isn't just any mess, it's a very special and very characteristic M&S corporate-governance mess.


  • Comment number 1.

    Why all the fuss? After all M&S is a shop. One of those businesses responsible for helping drive up household debt and increase our trade deficit.

    We need to shop less and make more stuff..

  • Comment number 2.

    Doesn't it always cause trouble when an indirect tool is used to solve a problem? Instead of just voting against the dual appointment of chairman and chief exec, the shareholders end up voting against Rose himself which is not their intention at all.

    Same thing with the interest rate debate - low interest rates may boost economic activity but they also lead to a house price bubble.

    This is a pervasive problem in economic life and we need to be careful about "signalling" to achieve a goal without being very aware of the unintended consequences of our signals:

  • Comment number 3.

    It seem someone is stirring in the dark to try to undermine MS for a takeover. Business, as often in politic, is more about playing the man instead of the ball.

  • Comment number 4.

    Why do shareholders want to interfere with a company's management structure when they are receiving a good dividend on their investment.Is it just sour grapes that Rose is doing OK.
    If they really believe their returns could be better then they should fire Rose & Co and look for somebody who they believe could do better.

  • Comment number 5.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 6.

    Robert, as you have not mentioned him for a while I would suggest a suitable replacement is Mr. Goodwin as he is at a loose end at the moment.

  • Comment number 7.

    ... it is possible to characterise the LAPFF position as a preference for finding a chief executive in panicky hurry rather than in a methodical and sensible fashion ...

    It is, but only if the person making the argument finds the idea of having 12 months to find a new executive an unrealistic timescale. Most of us, I suspect, would think that it was quite long enough and that M&S have been dragging their heels on the issue for quite long enough.

  • Comment number 8.

    M and S. The best example available of how not to run a business. They survive merely on past glories and a big property portfolio. They destroy, almost single handed, the UK knitwear industry on which their early success was largely based, chuck away their iconic St Michael label because it is uncool apparently (ha ha) then they wonder why things don't go too well. The food is OK as everyone knows, if rather over priced, but Waitrose are coming to get them on that. I think their past is well behind them and the future will not be good to them.

  • Comment number 9.

    If Mr Rose has to depart I am such Gordon will engage hime to advise on corporate governance. The name Myners rings a cash till!

  • Comment number 10.

    More trouble for the pension funds again.
    For how many more years are the pension funds going to be the big "losers" in the City?
    Perhaps they just operate (or plod along) as in the 60s and 70s, but haven't joined the modern "casino jungle".
    Therefore they will always be "easy targets".
    The Citys' wide-boys are too sharp for them.
    M&S has had problems ever since the City got involved.
    Should pension funds have their exposure to the City limited to 30% or similar?
    All the rest in Government bonds (worldwide)?
    One thing seems clear....pension funds should be shouting the loudest for heavy regulation, or all those pensioners will be losing out yet again, and again.
    Pensioners have a habit of saying "I lost half my pension in the downturn", thinking that their money just "disappeared".....but it didn' never has gone into someone elses pocket.
    That is the way of the City.

  • Comment number 11.

    Re #1 Wee-Scamp
    Time and again on this blog people come on and say 'Britain needs to make things' 'Manufacturing is the real economy' etc..Nobody ever says WHAT we are supposed to be making or how we are supposed to compete against economies whose wage costs are one third of ours. Even the German government has said they need to be LESS reliant on manufacturing for export, as they can obviously see the writing on the wall for industries that will need to be heavily subsidised to keep going in the future.

    You can't produce steel in this country for the same price as they do in India, and don't bleat on about 'quality' because everything is governed by price nowadays. Thats why the oceans are full of barely seaworthy rustbuckets built in the Phillipines or Mexico rather than Glasgow or Sunderland..they cost half as much. The same principle applies to practically every industry, unless you can come up with what in IT terms is called a 'killer app' that is so innovative and useful that you can charge what you like for it everybody competes on price not quality and thats why manufacturing is screwed in this country.

  • Comment number 12.

    Who has the biggest losses directly caused by management and trading decisions in the last 2 years, LAPFF or M&S.

    Businesss making poor decisions should be avoided. This is a matter for trustees.

  • Comment number 13.

    What is the previous investment record of the Local Authority Pension Fund Forum ?

    Is M & S and easy target to flex the muscles ! What did they do about RBS et al ?

    #4 Agree ! Very strange when the investment has delivered
    #3 Perhaps you have stated the most obvious ?

    Watch who is eating out with who at the worlds finest establishments and that may give a clue ???


  • Comment number 14.

    Have I missed something?

    What's to stop him resigning as Chairman, but continuing as Chief Executive until his preferred leaving date?

    That would ensure a smoother tranfer of power from his regime to the next, wouldn't it?

    What's so wrong with that? I would have thought that M&S shareholders would think that was a great idea. If I had M&S shares, I'd think it made huge amounts of business sense, particularly in these "difficult" times.

  • Comment number 15.

    It should be remembered that Rose came into M & S when it was in a terrible mess, and looked like it was going to be sold to Green, which would in my opinion have been a disaster. Rose has done a good job and should be congratulated for doing so not castigated when the entire British retail sector is having a horrid time - I expect M & s is doing better than most and is still here which is more than it looked like being before rose came to the helm

  • Comment number 16.


    I have just finished reading your book "who runs Britain"- the erevised addition I might add that brings in up to date with the current state of todays market.

    In the book you focus on M&S and one Sir Philip Green. Taking away from the fact that he is more likely not to be able to raise the cash for a bid for M&S. Do you think that Mr. Retailer himself is sitting in his offices, or playing with Simon Cowell on a beach somewhere pondering what he could do with M&S and whether it is worth all this hassle again?

  • Comment number 17.

    The "lack of manufacturing" argument is coming up again.
    M&S is probably a good example.
    How much of M&S stock would have been made in Britain 100 years ago?
    And how much today?
    You can't blame M&S for that, it's the modern way.
    Just like all other products, people in the Western World want 500 pounds a week to make anything.
    Much of the rest of the World will do it for 50 pounds a week, or less.
    Western Governments are well aware of this huge problem, hence our dependence on "services" and "finance".
    Unless the pound collapses to a tenth of its' current value, or we work for much less, or third world workers demand much more pay, or artificial trade barriers intervene, this situation will not change.
    We are left to make only "high end technology" or "bespoke" (custom made) products.....and that is not enough.
    Clothes can be made to high quality virtually anywhere, given the right equipment....and perhaps British customers couldn't care less where it was made, as long as the price is right.
    Our "inflation habit", combined with a fairly strong currency, has put us in a dodgy situation.

  • Comment number 18.

    Good on the LAPFF.

    It would be extremely hypocrytical of us, having clamoured for years for the insitutional shareholders to flex their muscles on our behalf, to now turn around and say they shouldn't.

    Rose knows his decision was unpopular, and institutional shareholders haven't exactly kept their disquiet behind closed doors. So why should this vote change it? It isn't a vote to say 'get out now', it is a vote to say 'we don't like the dual role, so get out next year'. There can still be an orderly succession, and there's no need for him to resign.

    It also sends a message to other instutions as well as M&S, to make them think twice about repeating their behaviour.

    If they don't put this vote forward and support it, then it is all about the short term again, not looking ahead long term. I thought that's what lots of people here were moaning about with regards to what has been happening in the City in the past few years...

  • Comment number 19.

    When a guy starts to believe he is so good he can dispense with generally accepted good corporate governance practices it's time for him to go.

    Why is he still there? Why, for God's sake have the institutional shareholders not put their collective feet down sooner?

    Well done LAPF. There should be more shareholders like you.

  • Comment number 20.

    Lovely pork pies.

  • Comment number 21.

    RE 11

    We are not competing on a level playing field with economies from China, India etc, which is why manufacturing has delcined. Laissez-faire may all be well and good - but only when governing parameters are universal, which in this case they are not. For example, minimum wage constraints, health and safety - european legislation etc do not apply to those contries outside of the union so these potential extra costs can be left out in their favour reducing the cost of manufacturing goods.

    Maybe this should be taken into account - maybe we should only trade with those countries that have agreed to the same minimum wage and H&S legislation and as trading partners are auditing against this.

    Lets level up the playing field, or not invite everyone to play!

  • Comment number 22.

    "Why all the fuss? After all M&S is a shop. One of those businesses responsible for helping drive up household debt and increase our trade deficit."

    It also employs over 75,000 people in the UK, not counting the hundreds of smaller businesses which provide it with various services, the UK farmers who supply much of its food, etc. Hence "the fuss".

    As for the ridiculous notion that shops are responsible for driving up household debt - there's only one person responsible for any individuals debt, and that's themselves. If you choose to get yourself a credit card and spend £5,000 on it, that's your decision- and your fault if you can't actually afford it.

    Overall, Rose has done a very good job. It's time for him to go, because M&S needs fresh blood and fresh ideas at the top to keep it at the top of its game, but it's silly to rush him out of the door now, when there's an orderly succession plan in place.

  • Comment number 23.

    Mr Peston - as a so called political editor WHY nothing about UK manufacturing output at lowest for 17 years????? - oh sorry that would bring more woes for ZanuLiebour.

  • Comment number 24.

    Re M&S, as usual Robert's remarks on incisive. One correction: the shareholder resolution from LAPFF is a 'special resolution' requiring a super majority (75% of eligible shareholders)to pass. In that unlikely event, anything near 50% support must surely require a positive response from the board. The issue is governance risk, not Rose. M&S's stakeholders need Sir Stuart to focus on the business today, not his legacy tomorrow.

  • Comment number 25.

    Are you proposing that China, for example, set a minimum wage similar to that of the UK's? Why not, say, £3 per hour? What say you? A compromise?

    I think I'll stop here...

  • Comment number 26.

    I can't see a problem... all the shareholders have to do is find the receipt, take Rose back to the counter and they'll have to give them a refund...or a new one...

    Regarding the points about retail bad v manufacturing good... the unit costs per hour thing is obviously a major factor...and that isn't going to be closed by anything other than our wages falling towards the competitor levels (so we can congratulate the government for at least making a decent start on achieveing this)

    But also we have have to face up to facts and recognise as in post #11 by Citygambler ------

    Thats why the oceans are full of barely seaworthy rustbuckets built in the Phillipines or Mexico rather than Glasgow or Sunderland..they cost half as much ---------------

    Their rustbuckets are cheaper than ours!!....... We just are not going to get into some wonderland of high-tech, uber competitive, out performance by simply 'being British, 'having native, clever smarts in our DNA', and having 'the govt pick winners' ---we could try boosting support for innovation by knocking two massive aircraft carriers on the head and spending the money saved ...but we won't.

    I heard someone the other day praising our defence industry as being world competitive.... I think that was wrong headed--somewhere within the percentage our GDP spent on making things to be blown up around the world, or blow up things.... is a a heavily subsidised industry crippling the rest of the manufacturing economny by it's subsidies----- anyone want to compare the amount spent on Nimrod with the amount spent on supporting rubbish sectors like online video, internet searching, digital media.........??

    (PS Obviously spending far too much and wasting far too much on weapons -even though we can then help tyrants recycle THEIR own investment money into tanks, anti-tank weapons, planes and surface-to-air missiles to provide some payback- isn't the whole story, and the key solution---- there obviously isn't a single key solution; only politicians believe that we believe that

  • Comment number 27.


    I am not proposing, merely pointing out the disparities between economies and the contraints therein. It isn't competition, its a white wonder manufacturing in the West cannot compete....

  • Comment number 28.

    It's all a bit - "Mr.Humphries-plots-to-oust-Captain-Peacock-as-floorwalker" in a 1970's episode of "Are You Being Served".

  • Comment number 29.


    I see both my contributions on eye-watering BBC pensions have been referred to the moderators

    Not relevant, I suppose

  • Comment number 30.


    Probably relevant, but also probably posted with this intended too.....
    Obviously, can't comment on the content since it can't be seen.

  • Comment number 31.

    #11 CityGambler

    We should MAKE prototypes again. Innovate, design and commercialise. Continue and grow manufacturing/engineering at the medium scale for domestic and european markets. Specialist (high value) infrastructure type "stuff" for global trade. But accept that high volume, low cost commodity "stuff" is done in cheaper economies (for now - who wants that cr*p anymore anyhow?).

  • Comment number 32.


    I hate to dent your argument because you were obviously on a roll but in reality a lot of the high spec vessels are still being built in Scandinavia, Germany, France, Spain and Italy. During the 80s and 90s when the Finns and Norwegians were building high spec vessels for the N Sea oil and gas industry we decided we couldn't do that anymore.... It was nonsense of course. We could still have done it but the Govt and its City chums didn't want to....

    Same applies today ..... nothing has changed. We do what the City and the Govt want to do and this is why the Germans and Danes have a multi-billion pound wind turbine industry whilst we made money selling our power companies to overseas owners.

  • Comment number 33.

    #31 Beatsy

    I like where where your coming from with your comments - it's a start at least

  • Comment number 34.

    Re #11. citygambler:

    Hmmmm the ocean used to be full of barely seaworthy rustbuckets built in Glasgow and Sunderland that cost 4 times the price - don't delude yourself that quality was a British product; far from it. We made rubbish and sold it for extortionate prices, that is why we have few manufacturers left (only the qulity ones survived).

  • Comment number 35.

    23. At 3:02pm on 07 Jul 2009, ronreagan wrote:

    "Mr Peston - as a so called political editor ..."

    Whoaa! Nick Robinson won't like that!

  • Comment number 36.

    Rose has a best mate called Green. Green is a dictator in business who succeeds and has himself to blame when he makes a mistake. Rose is a dictator in a shareholder company who has support when he wins buts lacks support when he fails. So what has Rose reallly achieved. Anyone can do it with other peoples money , let him try with his own money or borrow it. Where is the share price now with when he joined.

  • Comment number 37.

    Sucession is a problem in any business and increasingly as management has become more personal rather than process driven it has become more difficult. Too many egos and not enough management skill.

    Rose is pretty good at what he does but there are still huge issues at M&S outside the boardroom as well as in it. He is at least a retailer which is an improvement on when M&S had the board populated with retired civil servants, but where are the sharp young men and women thrusting forward from within the ranks? Phil Green has at least started his own school of retail management.

    The difficulty these days is that the modern style of egotistical management forgets it is not immortal, but has surrounded itself with sycophants thus preventing the development of a new generation of commercial leaders.

    If Rose goes then replacing him will be very, very expensive. Who will want the job? Who could do the job?

  • Comment number 38.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 39.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 40.

    As you say Robert, that's a very strange way to arrange a succession. Usually the key staff member gradually sheds his workload, not takes on another key role. It's also about time more institutional investors stood up to be counted.

    Re Manufacturing, it's not the salaries nor the lack of ideas. Industry has been crippled by poorly applied and misunderstood Health & Safety, Risk Management etc. It's easier to go abroad

  • Comment number 41.

    Gules123 (#16) "I have just finished reading your book "who runs Britain"- the erevised addition I might add that brings in up to date with the current state of todays market.

    In the book you focus on M&S and one Sir Philip Green."

    I suppose he could have covered Sainsbury, Tesco etc?

    Cosmopolitans - the world would be such a smaller place wthout them. To them, no doubt, people inclined to put being British first are just racist nationalists. They probably work together to put an end to such discrimination, as can be seen by the composition of London and the SE these days. Oddly, very few people see this for what it is, i.e. nepotism and hypocrisy cleverly contrived.

  • Comment number 42.

    Maybe Rose should ask Primark how to operate a department store. He might discover that the key to success is to give the customer value for money , but most of all to give them what they want, not what M&S think they should have.The days of affordable quality at M&S are long gone, the philosophy now seems to be the same as most other British businesses ; get as much out of the customer as possible for the least possible effort, and if they don't come back for more, too bad. Goods made in Britain, seem nowadays to be overpriced, not very reliable and not really fit for purpose. The emphasis appears to be quick profit, preferably excessive then move on and find another mug.

  • Comment number 43.

    #31 Beatsy

    There is much more to it than you state.

    The government has tried to do what you suggest.
    Witness the current crop of "Innovation Centres" that have sprung up with government and EU funding.

    These put old established companies out of business and then once the grants have gone everything disappears.

    What is needed is profitable innovation. Not state intervention.
    But of course local development agencies spurred on by golden tongued universities have to spend money.
    Ultimately a waste of time.

  • Comment number 44.


    Rubbish....... Are u suggesting the QE2 was a rustbucket?

    #40 ..... That's more to the point.. Health n Safety and other rules and regs as interpreted by over zealous jobs worths have added hugely to manufacturing costs......

    But - we all know that our Far Eastern competitors don't have the same regime (or taxation) to deal with. So why not stop buying from them until they do? After all, trade should also be about helping other nations become as advanced as we pretend to be not just making as much as we can out of them...... Or did I get that wrong.... :-)

  • Comment number 45.

    I have been an M&S shareholder since 1966. In my view Rose is the best CEO we have had in that time. He has transformed the stores so that it is now a pleasure to shop there. He is a master at merchandising and at showing off his wares to the best effect. It will be a sad day when he goes - not just for shareholders but for M&S customers too. True, he fell out with the institutional shareholders because they thought he had a god complex. If he did have one it would be because he is the best retailer at M&S for the past 40 years. By the way the institutions who disapproved of his being chairman as well as CEO are probably the same incompetents who made the Lloyds/HBOS merger happen (thinking they would use their Lloyds shares to shore up their HBOS positions) - they virtually sunk both in the process).

  • Comment number 46.

    What on earth is saturnine underwear?

  • Comment number 47.

    I prefer M & S clothes style before 2008 better than that at the moment, although I think that M & S is still the best fashion shop in high street for me.

    In my living city, M & S now sells more casual dressing. Before 2008, I like to go shopping in M & S, where I could easily find some elegant suit, dress, and good quality and beautiful sweater. The price of clothes was not expensive. The taste and price were well tailored to working class professional women. Since spring of 2008, especially since this year when M & S in our city combined men and women stores to a large shop, I found that the trend of clothes had been changed to casual wearing style, lots of sweaters, long and fat skirts, and beach skirt. It lost the temptation to me to think many clothes in M & S are very alluring for looking better, professional, and elegant. I used to think that: Oh, it is recession time, so people cannot have any mood to dress up too nicely. Perhaps M & S has been a little reverted back to the traditional house wife dressing style: easy going, pretty design on the rims and from the lace disclosed secretly from the plain dress. In the first floor where womens bra can be bought, I found many bras produced from different developing countries are not comfortable for wearing. It is just like shoes. The shoes produced by Clark in Britain are very comfortable to wear, while those from developing countries will make my not born nicely feet ache in the evening. I have wondered long time ago, even before I began shopping in M & S, that whether the purchasing team in fashion department stores need to find some not very fit and healthy women to try those bras, clothes or shoes before purchasing. Models are usually too stylish and healthy to sense any uncomfortable from dressing and wearing whatever it is.

    I found many women would like to go to Debenhams to buy dress for party, ceremony or for going to pub. For me, if I will buy clothes before Christmas, I only need to visit Debenhams and M & S. In Boxing Day, I would visit Next first. Different women have different shopping experience and likeness.

  • Comment number 48.

    kaybraes (#42) "The days of affordable quality at M&S are long gone, the philosophy now seems to be the same as most other British businesses ; get as much out of the customer as possible for the least possible effort, and if they don't come back for more, too bad. Goods made in Britain, seem nowadays to be overpriced, not very reliable and not really fit for purpose. The emphasis appears to be quick profit, preferably excessive then move on and find another mug."

    Exactly, and this is made easier by dumbing down the population through a) immigration and b) dysgenic fertility insidiously brought about through over-educating brighter females so they delay having families relative to the less bright. result, undiscerning customers and reduced quality goods but lots of packaging/spin in a desperate effort to compensate for real loss of value for money. Remember the TV hype/adverts?

  • Comment number 49.

    Seriously flawed analysis here. Reasons for this assertion:

    Rose's record at the helm of M&S is VERY ordinary. He took over when the company was at a low ebb but what has Rose achieved since then ... really achieved? Nothing of note. Yes, he has refurbished some shops. Yes, he has revamped some product lines. Yes, he seems to have calmed the internecine wars.

    What about the recent debacle in Shanghai? Rose's reaction was astonishing. He presided over a monstrous failure and simply said, we must learn some lessons here. I would have sacked him for that alone.

    If you are an M&S shareholder of, say, 3 or more years' standing would you be happy? Not at all as Rose has taken the price down by about 50% or so, last time I looked.

    Peston's analysis of the outcome of a victory at the AGM by those seeking to get Rose to give up one of his two roles is flawed. Nay, naive. I ask why would Rose resign if he were to lose the vote? After all, the vote merely seeks to get M&S to toe the line and stop one person holding the two top positions at a listed company at the same time. Rose and M&S is breaking serious rules here and they need to be brought to book.

    If Rose threw his toys out of the pram if he did lose the vote then wouldn't that tell us that he is not a serious holder of his offices anyway? Moreover, Peston's suggestion that the company couldn't do with the interregnum says a great deal: no succession policy, no one in the wings, one man grabs power and keeps it as weak management sit and wait for crumbs to fall from the table.

    And so on. M&S is better off without the ordinary man.


  • Comment number 50.

    I think the key issue for investors is this: the reason why Cadbury, in 1992, recommended the roles of Chairman and CEO being occupied by different people is because when they're hold by the same person there is a high correlation with corporate failure.

    As in all aspects of life, there will always be exceptions to this. However all studies I've ever come across point in the same direction.

    The management write John Argenti pointed to thhree things that typified a failed company:

    1. Autocrat in charge
    2. Over-leverage
    3. The Big Project

    I guess it's always going to be the case of buyer (investor) beware.

  • Comment number 51.


    "If you are a M&S shareholder of 3 or more years would you be happy?"

    The share price today at just over £3 is where it was in 2004. There are not many retailers who can claim that (perhaps only Next?) after the most savage beating clothing retail has taken in recent years.

    In my view the M&S of today bears no comparison to the one of Rick Greenbury ten years ago - that had a total lack of focus (while he was off doing some job for Government as they used to do (like Lord Rayner)). The stores were dark and dingy, old shelving, no focus on how and where to present. Dowdy clothes, with nothing much for younger women. In 2001 the share price slumped to around £1.30, and the experts were all talking about its demise. As one of the pundits said the "why would anyone go into M&S?"

    Luc and Rose, with vital help from George Davies, have transformed M&S into a shopping experience - admittedly I have the advantage of shopping at the Meadows but other stores have the same range and focus.

    The fact is that Philip Green saw the advantages of the brand (why otherwise would all sorts of people offer M&S vouchers as a reward?) and tried to steal it. I think he was a little bit greedy - probably another 50p would have sealed it and he could have had Rose working for him. When you look at his BHS you can only guess what might have happened to M&S if he had got it.

    The one thing that was stupid about M&S was the run up in 2007/08 to £7. But then a lot of shares ran up to stupid levels then and have since gone bust so the current solid look of the shares says to me that when things improve they will be back again to a reasonale level based on a return to the magic 1bn profit.

    I think M&S will be infinitely poorer without Rose

  • Comment number 52.


    majorroadaheadagain (#31) "The share price today at just over 3 is where it was in 2004. There are not many retailers who can claim that (perhaps only Next?) after the most savage beating clothing retail has taken in recent years."

    M&S and Next, like Green's empire is premised on peddled narcissism (an infantitle disorder) as females and feminiozed males do all the shopping along with easy to market to members of minority groups for whom appearance and image is all.

    Beware: the 'success' of such companies and their 'economic stability' is really just a sad reflection of our economy's root problems, and ultimately a barometer of its demise. They were in the frame when the National Socialists rose to power in Germany....

  • Comment number 53.

    #52. Crikey. I was at M&S doing some shopping only last Saturday.

  • Comment number 54.

    52 and 53

    Me too. But I didnt see anything of Bernie Eccleston..

  • Comment number 55.

    He's in F1.

    Perhaps you're distracted by all the razzle-dazzle in lieu of quality? You need to look more closely at proportional control given population base rates (0.5% in the UK and under 3% in USA) along with market fundamentals and consumer debt. Then you need to look into what the now rebranded 'War on Terror' is really all about, as 'the ever so evil ones' would probably shut down all the major department stores (perhaps with the exception possibly of John Lewis given their quasi-communist business model) and music and entertainment industries as the spawn of Satan.

    Please don't tell us you like it....;-)

  • Comment number 56.

    Bernie's clearly a man who thinks he knows how to spot a man who gets things done, or at least, a man thinks he's seen the writing on the wall?

  • Comment number 57.


    Stuart Rose gets 60% of shareholders vote. How much of that is banks/pension funds etc holding shares in nominee accounts where they have the voting rights? Since the Big Bang being a shareholder doesn't mean you have voting rights. That goes to the people in Financial Services holding your pension fund or shares for you.

    In fact, this would make for a very good series of articles on how a minority of people can get control over the economy by going into the Financial Service Sector....

  • Comment number 58.

    57 I agree with your general comment. It happened at Lloyds (with the Government doing the egging on (Sir Victor didnt need much pushing) to such an extent that they were allowing Lloyds/HBOS to have over 30% of savings and mortgages, a number that was unbelievable in competition terms. The institutions who owned shares in both companies were delighted as HBOS was going down the pan. They all conveniently forgot Competition Niellie or whatever her name is but that is a story for later. The only trouble is not only did the clever institutional shareholders lose their HBOS bacon but the same people lost their Lloyds money as well. Without the bid Lloyds would have had little exposure to the toxics and would probably have not needed a government bail-out. In my view it is even worse than RBS and ABN Amro - the Lloyds bid was not close until January this year, when everyong knew it was a total loser (everyone that is except Sir Victor, Eric Daniels and the Institutional shareholders. It makes M&S look like petty cash.

  • Comment number 59.

    James Surowiecki made the point that "trying to find smart people will not lead you astray. Trying to find the smartest person will." In looking for a CEO business of course always tries to find the smartest person. Maybe this is the M&S problem. Stuart Rose has spread himself mighty thin over the organisation constantly appearing as its spokesman on everything when maybe he should have looked for some real smart people in the organisation to do more. Collective wisdom probably knows more about what people want from a shop, the shareholders hold that collective wisdom if only they realised it. The job of the CEO is to provide the motivation and finance to put this collective wisdom into play. Rose needs to modernise his view of running a business.

    As my mother-in-law once said M&S failed when it stopped selling her corsets! If she had been a shareholder perhaps she could have made the point.

  • Comment number 60.


    When Rose was first appointed as CEO a man I know said Rose was a "Class act". This person said he was going to invest heavily in M&S there and then. I don't know whether he did but the performance of the shares HAS been left wanting since then.

    I took a look at the share price just after my post and notice that it has rallied a little recently.

    If I were a shareholder in M&S I would NOT be happy with Rose. For a class act that is a woeful performance. If I were a shareholder with my money in M&S I would not be directly worried whether the shares in any other retailer were better or worse.

    Yes, the people before Rose were iffy. However, my question is this, what has Rose done that is not ordinary? If I had been appointed instead of Rose I would have done the same as Rose, give or take. Brightening up the shops, rebranding, refocusing, sacking the ones who want to spend their time at work gossiping and fighting each other. I am not a retailer but Rose is ... I see little real value added from Rose. Just an ordinary man.

    What about the Karaoke charade?
    What about the Shanghai disgrace?
    What about the Chairman/CEO disgrace?

    To name but three from dozens of things this ordinary man has done so badly.

    Rose spoke after this week's AGM as if he he won a stunning victory and that he was vindicated. Far from it, by centring the M&S world around him he is weakening the company. Let's see what happens as 2011 gets nearer and the time for him to leave approaches. Uncertainty? Return to in fighting? Massive "bonus" for Rose? Probably all three!

    Rose is a disgrace to M&S and all listed companies for putting himself ahead of his company and corporate governance best practice.



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