Boardroom Politics Get Rough as CEOs Fall

Strategic Insights -

Power struggles arising from poor performance have convulsed the boardrooms of two giant companies, Marks & Spencer and Barclays, with spectacular evictions of their chief executives. Keith Oates, M&S's deputy chairman, has agreed to retire early to make way for Sir Richard Greenbury's preferred candidate, Peter Salsbury, while Martin Taylor has walked out of his job as Barclays' chief executive. The departures come as non-executives in both companies have expressed disillusionment with their respective CEOs' failure to take their colleagues along and communicate effectively.

Key Takeaways:

  • Keith Oates, M&S's deputy chairman, has agreed to retire early after failing to persuade non-executive directors to take the top job, allowing Sir Richard Greenbury's preferred candidate, Peter Salsbury, to succeed him as chief executive.
  • Martin Taylor, Barclays' chief executive, has walked out of his job due to failure to communicate and carry top staff with him on key decisions, including the botched BZW sale and exposure to Long-Term Capital Management.
  • The departures highlight the importance of team-playing skills and ability to execute ideas, with one non-executive director stating that "management is about taking people with you, developing ideas and executing them."
  • The heavyweight non-executive directors, including Sir Martin Jacomb, who nominated Salsbury for the M&S chief executive role, have been instrumental in making these changes.
  • Salsbury is seen as the right candidate for the M&S chief executive role due to his retailing and people skills, which will be valuable in driving the company's strategy.

Statistics:

  • M&S's deputy chairman, Keith Oates, will retire early after a 10-year tenure.
  • Martin Taylor has been Barclays' chief executive for 3 years before his departure.
  • Barclays' non-executive directors became disillusioned with Taylor's failure to communicate and carry top staff with him over the past 2 months.
  • The BZW sale was botched, resulting in significant losses for Barclays.
  • The exposure to Long-Term Capital Management contributed to the decision to remove Taylor from his role.

Sources:

  • The Sunday Times, 1998
  • FTSE 100 index chairmen
  • Barclays' non-executive directors