Fifth exec sucked into Tesco's £250m black hole

Another day, another senior boss at the store giant gets suspended. This time it's commercial director Kevin Grace.

by Andrew Saunders
Last Updated: 14 Oct 2014

Tesco commercial director Kevin Grace has been asked to step aside as a part of the investigation begun two weeks ago into the overstating of the supermarket's first-half profit by £250m, according to the FT this morning.

His departure brings to five the total number of Tesco Grands Fromages who have been told to stay at home since the profits black hole appeared over the event horizon a fortnight ago. The others are: Chris Bush, UK managing director, Carl Rogberg, UK finance director, John Scouler, food commercial director and sourcing head Matt Simister.

Crikey. Every new boss wants to bring in their own people of course, but new CEO ‘Drastic’ Dave Lewis must be thinking that this wasn’t quite the way he’d imagined doing so.

Coming on top of the unfortunate delivery of a £30m Gulfstream jet and harsh criticism from Warren Buffet, the world’s most successful investor, Lewis’s blood pressure is under assault from all sides. Talk about a baptism of fire.

But arguably the one who is most likely to be really feeling the heat is chairman Richard Broadbent. Many investors are now more or less openly wondering whether Broadbent should stay or go. The appointment of two new retail veteran NEDs may keep the baying pack off his case for a bit longer, but if the crisis cannot be defused fairly quickly then his tenure looks much less certain.

Of course the business of despatching the chairman of any company is a tricky one, if anything even more fraught than delivering the coup de grace to an underperforming CEO. The unenviable job of wielding the knife falls, according to the code of corporate governance, to the Senior Independent Director - in Tesco’s case Lewis’s old Unilever colleague Patrick Cescau.

But that is very much a last resort - in a crisis the chairman should, all other things being equal, stick around at least long enough to sort out the mess. That way a more measured decision about his or her future can then be made.

Whether Broadbent can stick it out long enough for that due process to play out or not remains to be seen. The gravitational pull of £250m should not be underestimated…

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Upcoming Events

Latest on MT

The reason women are less likely to get graduate jobs

The reason women are less likely to get graduate jobs

Despite the high priority employers give to diversity, the gender gap in graduate recruitment persists.

Why Philip Green's savaged reputation matters

Why Philip Green's savaged reputation matters

The retail tycoon is still rolling in wealth but his public image could be problematic - and what about that knighthood?

Only 'radical honesty' can rebuild trust in business, and save us from Green and Trump

Only 'radical honesty' can rebuild trust in business, and save us from Green and Trump

Philip Green and Donald Trump are harbingers of a post-trust future that can only be avoided by a progressive revolution in business leadership.

'Don't be governed by risk' - Pitcher & Piano founder Crispin Tweddell's start-up cocktail

'Don't be governed by risk' - Pitcher & Piano founder Crispin Tweddell's start-up cocktail

The entrepreneur-turned-investor shares his recipe for success - know your customer and be ready to take a chance.

How Mike Ashley can fix Sports Direct's reputation

How Mike Ashley can fix Sports Direct's reputation

His company's name has been well and truly sullied, but Mike Ashley still has the chance to reform it, through transparency.

Get ready for the 'Lego' organization

Get ready for the 'Lego' organization

In a rapidly changing world, businesses will become amalgams of building blocks that come together for specific purposes.