Andersen elects Grafton to resolve row

The board of Andersen Worldwide, the international accounting and consulting firm, has appointed its chairman as acting chief executive in an effort to defuse the row that has seen the organisation's partners twice reject the management's nomination for chief executive.

The 27-strong board said the unanimous election of Robert Grafton, a 25-year veteran of the Chicago-based firm, "decouples the CEO electoral process from the separate and distinct process of achieving constructive organisational change".

At a meeting in Paris earlier this year the firm's 2,700 partners overwhelmingly decided to keep the Arthur Andersen accounting arm and the Andersen Consulting operation together. But it is clear that continuing tensions about the future of the world's biggest accounting and consulting firm were behind the failure last month of first Jim Wadia, head of the UK accounting operation, and then George Shaheen, world-wide head of Andersen Consulting, to secure the two-thirds majority necessary to succeed Lawrence Weinbach as managing partner-chief executive.

Mr Weinbach - seen as a "statesmanlike" figure and one of the architects of the 1989 split between the traditional business advisory arm Arthur Andersen and Andersen Consulting, which has increasingly become associated with information technology projects and outsourcing - is not seeking a third term as head of a firm that employs about 100,000 people and last year reported revenues of $9.5bn (pounds 5.7bn). He plans to retire to pursue other interests at the end of next month.

Under the interim arrangements announced yesterday, following the board's weekend meeting in New York, a group of about 10 partners will be selected to conduct a wide-ranging review by next spring.

It is understood that the group will examine "anything and everything", including such issues as reorganising the board to reflect the fact that the consulting operation is now as large as the accounting firm and friction over believed differences in earnings between US partners and those in the rest of the world. The team will also look at ways of improving the firm's already renowned technology and training efforts as well as how to build on its service to clients.

The board hopes that having a much smaller group than the Andersen 21 body, which involved more than 70 partners when discussing the first overhaul of the firm since the consulting operation became a separate entity, will speed up the decision-making process.