M&S to stop explaining and start complying?

From The Telegraph 04/07/09:

Roger Lawson, a director at the UK Shareholders' Association (UKSA), said that the body "might well support" the resolution that is being put to shareholders at M&S's annual shareholder meeting on Wednesday.

The backing of M&S's private shareholders – who account for around a fifth of the chain's ownership – could be crucial to the resolution being passed.

The special resolution has been brought by the Local Authority Pension Fund Forum (LAPFF), which represents 48 local authority schemes with £95bn in assets. The resolution calls on the M&S board to appoint an independent chairman at M&S by July 2010, a year earlier than planned. Sir Stuart is currently both chief executive and executive chairman.

Mr Lawson said: "There is a corporate governance issue. As an organisation we have always supported the combined code. We would encourage a separation of roles."

The soft-touch ‘comply or explain’ nature of the Combined Code on Corporate Governance essentially allowed M&S to opt out of keeping the roles of heading up the executive and non-executive arms of the company separate. M&S, of course, stands out as one of very few public companies who choose to combine the roles – despite the risks to the robustness of NEDs as corporate watchdogs and the ensuing unrest that may be caused to shareholders.

However meritorious the reasons may have been at the time for vesting in the same person ultimate executive and non-executive power, I’m not so convinced they hold much water now. M&S have clearly turned the corner from the dire straits they were in when the decision was made to combine the conflicting roles and at least now have a sense of common direction and brand placement.  While M&S face challenging trading conditions and an uncertain future going forward – not to mention a share price which has dropped through the floor in the last 18 months or so - the same could be said of many high street stores at the moment.