Marks & Spencer’s biggest shareholder has rejected a fresh explanation by the retailer about its decision to promote Sir Stuart Rose from chief executive to executive chairman.
The rejection could potentially lead to Legal & General (L&G) forcing a shareholder vote on Rose’s promotion at M&S’s shareholder meeting in July.
Last week, M&S chairman Lord Burns and deputy chairman-elect Sir David Michels met L&G to set out the rationale for the promotion, which the shareholder believes contravenes the combined code on corporate governance.
Yesterday, L&G, which owns 5 per cent of M&S, said: “Following our expression of concern that Sir Start Rose will become executive chairman, we met the company to hear their explanation for the appointment.
“We are grateful to Lord Burns and Sir David Michels for arranging the meeting and while we understand their arguments, we do not agree that this is a necessary structure to allow for the successful appointment of a successor for the current chief executive.
“We do not support a dilution in corporate governance standards, particularly in leading UK companies.”
The combined code states that a chief executive should not become chairman of the same company.