Greenbury quits early as chairman of M&S

MARKS & SPENCER is today facing the dawn of a new era following Sir Richard Greenbury's surprise decision to stand down as chairman a year earlier than expected.

Sir Richard, who spent 46 years with the company culminating in eight years at its helm, announced the move at a hastily called board meeting yesterday. However, the departure had been under discussion for some time. It is understood that Sir Richard's difficulty in settling into a less prominent role was creating tensions within a company being set on a fresh strategic course by the new chief executive, Peter Salsbury.

Sir Richard is being replaced on a temporary basis by Brian Baldock, the former deputy chairman of Guinness, who - with the headhunting firm Whitehead Mann - is leading the search for a permanent non-executive chairman.

The departure of Sir Richard, the architect of Marks & Spencer's rise to become Britain's leading retailer before the crisis struck last autumn, comes as Mr Baldock and his fellow directors begin a three-day meeting today, away from the company's Baker Street head office, to discuss a strategy to put the struggling business back on track. Last month M&S announced profits nearly halved last year, from pounds 1.1bn to pounds 655m.

Mr Salsbury said Sir Richard's early departure was a result of the fast pace of change at the company and that Sir Richard felt unable to contribute effectively as a non-executive director. This view was echoed by Sir Richard yesterday, who said he was finding it difficult to come to terms with being a non-executive chairman "after having been an extremely successful, hands on executive chairman".

Sir Richard said he had been on holiday in Venice, reading over the hundreds of pages of M&S's strategic review, when he had made his decision to quit. "I asked my wife, am I the right person to be doing this, participating in something that will determine M&S's future when I am unlikely to be around long enough to see it through... I am convinced I am doing the right thing. I was not comfortable with participating in decisions I would not be there to see come to fruition."

In the City, which had enjoyed a combative relationship with Sir Richard, M&S shares closed up 1p at 362.5p.

Sir Richard, 62, stood down as chief executive in February when the roles were split and Mr Salsbury was appointed chief executive after a boardroom row in the wake of last autumn's sharp fall in profits.

Yesterday he also disclosed that he had wanted to split the roles of chairman and chief executive at the beginning of 1998 but had been persuaded by the board to stay on as executive chairman, "a bad decision culminating in last November's calamitous boardroom rift".

Even after abandoning the joint role, Sir Richard came under fire recently when it emerged that he was being paid pounds 450,000 a year for a three-day week in his new post. The company said this had no part in his decision to step down.

In common with other M&S directors, Sir Richard is not on a contract and will receive the standard compensation of three months' salary, about pounds 110,000. He will also get his company pension of pounds 465,000, based on the salary he received as an executive.