In a move that’s unlikely to go down well with the corporate governance lobby, Sir Stuart - who was this year voted as Britain's Most Admired Leader in our annual MT poll - is replacing Lord Burns as chairman of the board, but hanging on to his executive role. FD Ian Dyson’s job has been extended to cover the retail business, but there’s apparently no plan to appoint a new CEO – at least not before Rose’s retirement, which has now been pushed back to 2011.
The move – which comes as part of a major overhaul of the M&S senior management team – is supposedly the brainchild of ex-Whitehall mandarin Lord Burns, who apparently thinks that it ‘creates the right leadership structure’ for M&S. ‘Stuart has the unique skills to continue the challenge of making M&S a world class retailer, and to develop the future leaders of the business,’ he said today.
Clearly the succession angle is significant here. Rose was rumoured to be retiring next year, so this shake-up looks like a pre-emptive strike against possible succession wrangles. As many companies have previously discovered to their cost (including M&S), it’s hard for the CEO to do his job when everyone thinks he’s leaving. And there’s also been a shake-up of the next layer of management; as well as Dyson taking on the Operations Director role (which also includes HR), clothes guru Kate Bostock and food boss Steven Esom both join the board, while retail director Guy Farrant and three other top execs are leaving the business.
On the other hand, it’s an interesting time to be strengthening Rose’s position. He’s presided over a remarkable turnaround in the retailer’s fortunes since he was parachuted in as CEO in 2004 to fight off Sir Philip Green’s takeover bid. But after successive quarters of sales growth, the wheels appeared to come off slightly over Christmas – M&S lost market share to rivals, and if its current sales are anything to go by, things haven’t improved markedly so far in 2008.
The US-style governance model is also likely to prove controversial. Here in the UK shareholders tend to get a bit sniffy about one person acting as CEO and chairman, even if he is a knight of the realm. M&S has appointed non-exec Sir David Michels as deputy chairman, presumably in a bid to appease shareholders, but it remains to be seen what kind of power he’ll be able to wield.
However, perhaps this is the most sensible way of managing the post-Rose transition. And it might give Sir Stuart a bit more time to concentrate on his out-of-work hobbies – like walking naked down Ealing High Street...