Sky News business presenter Emma Crosby

Sir Stuart Rose is going to become an even busier man.

This morning M and S announced that its Chief Executive will now become Executive Chairman as current Chairman Lord Burns steps down at the beginning of June.

It's very unusual for one person to effectively be the CEO and Chairman. Normally shareholders get quite shirty about arrangements like the is as they become concerned that one person could wield too much power.

Traditionally the CEO's job is to run the business while the chairperson keeps the directors in check and makes sure the shareholders are happy. 

Can Stuart Rose do both? Well, from talking to my sources in the city the answer's a very firm no.

The commentators I've spoken to say there's a conflict of interest here. How can Sir Stuart continue to run the company on a day to day basis and keep an objective view of how his directors are performing?

And who's going to look after shareholder value? Of course that's the job of both CEO and Chair. But with the share price falling from a high of 668 pence in October last year to around 375 pence today   wouldn't it be best split between two people?

The other bone of contention is the way the announcement has been handled. My city pundits say it would be far more preferable if Sir Stuart's promotion was a short term arrangement until a successor to Lord Burns can be found. 

There's every indication though that this a permanent move. And what's happened to Lord Burns? Speculation mounts that he may be ill or has fallen out with his colleagues.

M and S say this board room reshuffle was actually his idea. When Sir Stuart joined M and S in 2004 he said he would only stay for 5 years. Now he's signed up until 2011. Was the Executive Chairmanship his price for staying on and steering the retailing giant through uncertain times ahead?

And uncertain times they are. A disastrous trading statement at Christmas, when Sir Stuart admitted that conditions in the clothing market were the worst they had seen for 10 years, saw M and S shares fall a whopping 18 % in one day.

If the outlook is tough, Sir Stuart might find that he not just dealing with Jeremy Paxman's complaints about poorly fitting under pants. The shine may just start to fade on the man feted with turning M and S  around and fighting off a take over bid from arch rival Sir Philip Green.

Let us know what you think

Comments

[Khalid 11 Mar 2008 10:38:38]

Sir
Whilst M&S has been a long standing British success story driven by such heads of success, Lord Burns' resignation from the frontline is one of surprise and indeed a welcome prospect for future stability.
Not only has M&S been affected by consumer demand for quality and affordable prices, but when you have a retail giant driven by a failed bank head, then its not the market that is to blame, but those who put these divine assets in our pants.
If Lord Burns' customer focus is anything to go during his tenure at the Abbey, then I for one will not be crying tears, but giving out roses to all as a sigh of relief.
Thus far as the fact surrounding dual persona to steer the company through waters rough, then [Would You Mind] asking Lord Burns to sort out his outstanding [Loose Ends] sooner rather than later, so as to allow British prosperity and cut the rate of interest charged on M&S cards to kick start the M&S economy or will another unlawful default be lawfully challenged?

[Edward London 10 Mar 2008 17:52:17]

A Company is meant to have the best interest for the shareholders and if Mr Rose's dual position appointment as CEO and chairman affect the company negatively it shall not be a bed of roses. Makes you think after the recent examinations of top CEO'S in the U.S what are the ones in power are really up to.