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Lukewarm welcome for Banham

Nigel Cope
Monday 16 October 1995 23:02 BST
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NIGEL COPE

The appointment of Sir John Banham, the former director-general of the CBI, as the next chairman of troubled retail group Kingfisher met with a mixed reaction yesterday. Though analysts and institutional investors were relieved the company had finally made an appointment after a nine- month search and agreed Sir John was a high-profile choice, there were concerns his bulging portfolio of non-executive directorships and lack of retail experience would reduce his effectiveness in the role.

The company has declined to comment on Sir John's remuneration, but there are concerns over the possible salary level. Before his demotion to chief executive, Sir Geoff Mulcahy earned more than pounds 1m in his last year as Kingfisher chairman.

Kingfisher's shares closed 8p lower at 502p yesterday though the fall was attributed to the possible impact on the group's Superdrug chain after Asda's decision to cut the price of over-the-counter medicines and court a drugs price war.

One retail analyst said Sir John was "the wrong man for the job" and that Kingfisher would still be dominated by Sir Geoff . Another expressed concern that Sir John's other responsibilities might limit the time he can devote to Kingfisher. He is chairman of Tarmac and West Country Television and a non-executive director of National Westminster Bank and National Power. Kingfisher has said Sir John will spend two days a week at the company.

Another retail analyst said the appointment of a former McKinsey management consultant continued the company's apparent reliance on outside advisers. Tim Breene, the company's former strategy director, who left as a result of the boardroom shake-up, was also ex-McKinsey and Kingfisher's Marylebone Road headquarters sees a steady stream of management consultant visitors.

One institutional investor said Sir John was "a bit of an unknown quantity" in the City but that he should prove capable of fulfilling the role of an independent chairman.

He joined the company as a non-executive director yesterday and will replace Sir Nigel Mobbs early next year after Sir Nigel leaves the board after 13 years of service.

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