Jeremy Warner's Outlook: M&S investors show prowess by abstaining

If you don't do what we want, we'll jolly well go and, er, er, abstain. The big investment institutions are proving their usual feeble selves in registering no more than a protest vote about Sir Stuart Rose's elevation to the chairmanship of Marks & Spencer at this week's annual general meeting. Rather than vote against Sir Stuart's reappointment as a director, which judging by the fury some of them have expressed is what they should be doing by way of retribution, most of those not actually voting in favour will merely abstain.

Yet from their own point of view, this is actually a more sensible strategy than it might appear. Few of them want to provoke Sir Stuart into resigning, which even if the discontents are not in the majority, would very likely occur if sufficient voted against his reappointment outright. But they do want to express their anger at what's occurred.

Even in the good times, Sir Stuart's elevation would have been an issue. The combined code doesn't wholly bar chief executives from becoming executive chairmen, but it does require a decent explanation, and other than the board's insistence that Sir Stuart might have left had he not got the post, one has not yet been given.

Two factors have acted to enhance the sense of grievance. One was that the company badly mishandled the announcement, by implying that it had consulted widely with shareholders on the reshuffle, and that it had been well received. In fact, neither of these claims were true.

The other is that M&S's trading and profits have since gone into a nosedive. There were further big downgrades among brokers yesterday. Ominously, the company's insistence that the deterioration is 70 per cent down to squeezed consumer spending is now quite widely viewed with contempt.

The speed with which perceptions have changed is a reminder to all chief executives of how easy it is to trash a reputation. One moment Sir Stuart was up there as one of the most feted retailers of our times. Now his competence is being widely questioned.

The board took the view that it needed Sir Stuart to stay so as to shepherd M&S through the bad times. He got the chairmanship out of it, but he must be starting to think it was the wrong end of the bargain.