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M&S shareholder tension grows ahead of AGM

Marks & Spencer is heading for a battle with investors at its AGM on Wednesday over its corporate governance.

M&S is facing a shareholder vote on a resolution to force the retailer to split the chairman and chief executive Roles, positions which are currently both held by Sir Stuart Rose.

However, according to The Sunday Times, Marks & Spencer plans to ignore the vote demanding the appointment of an independent chairman by July 2010.

The newspaper said that M&S could ignore the vote of the resolution put forward by the Local Authority Pension Fund (LAPF) to split Rose’s role, as it is only an “advisory” vote that does not need to be acted on.

M&S had said that it will split the roles after a new chief executive is found, while the LAPF argues that a new chairman should be found first.

The director of the UK Shareholders’ Association (UKSA), Roger Lawson is also reported to have said the body “might well support” the resolution. The UKSA represents around 200,000 private shareholders.

Former chief executive Sir Richard Greenbury has criticised shareholder groups for their “vindictive” attitude to Rose, according to The Daily Telegraph. He told the newspaper that shareholders were running a “vendetta” against Rose who should be allowed to get on with his job.

M&S is also understood to have asked the Financial Reporting Council, which produces the corporate governance code, to clarify its rules over a chief executive becoming chairman, and to give better guidance on succession planning.

Rose is expected to approve the internal candidates to succeed him at the retailer’s AGM on Wednesday. Finance chief Ian Dyson, head of food John Dixon and executive director for general merchandise Kate Bostock are the preferred candidates to replace him but there is pressure from some shareholders to begin an external search.





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