Sir Ken of the supermarket chain steps down |
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Published
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Sat, 28 May 2005 06:40
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Morrisons, the fourth largest supermarket in Britain, has generated three profits warnings since it bought the rival group Safeway last year as integration prooved more difficult than imagined.
The executive chairman, Sir Ken Morrison who has run the company for almost 50 years, has made an exodus from the day-to day functions but will concentrate on the firm’s strategic vision. The 73-year-old Sir Ken will remain as a chairman of the PLC board for a year and Bob Stott who was recently promoted, as a Chief Executive will take over as the Chairman of the operating board.
Actual problems with Morrison started cropping since the acquisition of the £3bn Safeway group, until then the group could accolade of the best-managed retailers. The company was witnessing huge running costs, describing its finance department as being "not quite up to the task". KPMG was subsequently called to conduct "detailed analytical work" after which the group will be in a position to issue guidance on earnings.
With the shareholders not having a clue of the financial state of the group, it was expected of the company to improve their boardroom benchmarks.
The company was candid that it would define "succession plans", and make further statement about its intention in a year.
Incessantly avoiding the corporate governance norms and procedures, Sir Ken is hit by tremendous criticism.
The shareholders were point blank about their intentions at the AGM held yesterday.
| Institutional shareholders expressed less enthusiasm and some 20% disagreed to support Sir Ken’s re-election as a director. 11% of the shareholders were unable to attend the AGM, another 29% voted against the director’s remuneration report. They held the belief and were not satisfied with the fact that board received increase pay last year despite the disorder and the consisting problems.
Sir Ken successfully closed the meeting by saying he had been inundated with personal messages of support, most saying: "Keep it up, you're doing a good job."
He also said in his statement while addressing the meeting attended by 400 members that sales had been quiet satisfactory in the recent weeks with 5.4 per cent higher in the first fifteen weeks as against the 4.1% rise in the initial six weeks.
"I haven't thought about it yet, “ was the instant answer given by Sir Kent when asked as to how his role would change with the new development. When asked if the move was his idea he said, "I think it emerged from the general discussion.”
Another announcement indicating the appointment of a Finance Director, Richard Pennycook was made, who had been associated with RAC, a leading motoring group.
David Jones, Non-Executive Director along with the Deputy Chairman is in quest of four quality-driven non-execs and hopes to appoint the team within the next six weeks.
Morrisons did express that the operating margins will be considerably low than last year for most of the current year and was also unable to provide lucid understanding on operating profits until “further detailed works”.
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