Rose has finally bowed to calls from the corporate governance lobby to give up his £100,000 stake in Lucky Voice, the chain of karaoke bars owned by lastminute.com entrepreneur Martha Lane Fox. ‘I have unwound the investment in Lucky Voice,’ the M&S boss revealed yesterday, in a speech to the Investor Relations Society. ‘Perhaps it should be called unlucky voice.’
The reason people have been getting their M&S undies in a twist about Rose’s personal financial affairs is that Fox is also happens to be a non-executive director of M&S – by dint of which she sits on the compensation committee that sets Rose’s pay. Shareholders (led by the Association of British Insurers) argued that this could lead to a conflict of interest – if Fox was beholden to Rose as an investor in her business, would she really be able to exercise her responsibilities with genuine independence? Rose clearly thought so, but he apparently decided that the noisy row was becoming an unnecessary distraction (much like karaoke itself, you might argue).
Nobody’s suggesting that anything untoward had gone on here – or even that it ever would. But that’s not really the point. Like Caesar’s wife, non-executive directors must be above suspicion. If there’s any hint that their independence might be affected, it defeats the point of having them there in the first place.
And there’s clearly a bigger picture here. Rose’s recent elevation to executive chairman has gone down like a lead balloon with investors, who are worried that there won’t be enough strong voices in the boardroom to keep Sir Stuart in check (the late Sir Derek Higgs certainly wouldn’t have approved). So there’s even more reason for the M&S boss to be whiter-than-white at the moment. Particularly since the recent performance of M&S (which appears to be struggling as consumer spending slows) has made him less bullet-proof than he was 12 months ago.
Some commentators are suggesting that Rose may even have saved himself a few quid by getting out of a consumer business as a downturn approaches. But we’re not so sure: we find that when we’re desperately hunting around for a decent remortgage deal, there’s no better way to unwind than with a few choruses of ‘I Will Survive’...