The M&S boss, who has come in for heavy criticism following his recent elevation to executive chairman, is back in the headlines over his investment in Lucky Voice, the chain of karaoke bars founded by lastminute.com founder Martha Lane Fox – who also happens to be a non-executive director at M&S. The Association of British Insurers says that Fox can hardly claim to be an independent voice in the boardroom when she’s receiving financial backing from the boss.
The ABI told the Times that the investment raised further questions about corporate governance standards at M&S. ‘This is another example where the company has deviated from the code,’ said investment affairs director Peter Montagnon (that’s the Combined Code for shareholders, which outlines best governance practice). ‘[It] needs to provide an explanation to investors if they wish Ms Lane to remain independent’. If it doesn’t, the ABI is threatening to kick up a fuss at the AGM in July, which is the last thing M&S needs.
Since Sir Stuart is spending his own money, it’s tempting to think this should be a private matter – and thus nobody else’s business. But you can also see why shareholders might worry about a conflict of interest – after all, Fox also sits on the remuneration committee, so she even gets to decide what Sir Stuart gets paid. And given that M&S has already provoked the ire of the corporate governance lobby by promoting him to executive chairman – which sparked demands for strong independent directors to offset his dominance of the boardroom – it’s not surprising that shareholders are particularly sensitive about this issue.
It certainly looks as though Rose’s investment in the karaoke bar chain is going to cause him some serious headaches. For the moment he’s continuing to do it My Way and insisting that I Will Survive. And there’s certainly no sign of him asking the M&S board to Please Release Me. But there are clearly a lot of Suspicious Minds around – let’s hope he can persuade them to Let It Be (ok, that's enough - Ed).