The Local Authority Pension Fund Forum said yesterday it would file a shareholder resolution at Marks & Spencers's annual general meeting next year if the retailer does not move to split the chairman and chief executive roles.
Earlier this year Marks & Spencer came in for heavy criticism from shareholders after it proposed the appointment of its chief executive, Sir Stuart Rose, to the dual role of executive chairman and chief executive. Shareholders said that the dual role breached corporate governance best practice. However, at the retailer's annual general meeting which was held on July 9, the majority of shareholders supported the elevation but 22% abstained or rejected Rose's promotion.
Ian Greenwood, the chair of the LAPFF said: "As a representative body of large institutional investors in Marks & Spencer, the Forum believes that the risk of the company continuing downhill from its current shaky position has been increased as a result of the combined roles. All this takes place in an unfavourable retail market environment."
Greenwood added: "We believe that concerned shareholders have no alternative but to continue to push for the combined roles to be separated. To this end, the LAPFF will be submitting a shareholder proposal at the 2009 Annual Meeting of the company to separate the combined roles."