The Local Authority Pension Fund Forum has told Marks & Spencer it does not support the company's decision to appoint Sir Stuart Rose as its executive chairman. The group also warned it would be a significant breach of the Combined code. Responding to a company letter to shareholders, the forum, which represents 48 local authority pension funds with a total value of some £95bn, has said it does not believe there is sufficient justification for the chief executive, Sir Stuart, to also take on the role of chairman. In a letter to the current Marks & Spencer chair, Lord Burns, the forum suggests that while investors might tolerate a temporary combination of the roles of chair and chief executive, it is not convinced that the company has provided grounds for a breach of best practice that will last three years. It has also queried why Sir Stuart cannot remain as chief executive while the company continues to plan for succession, and will raise the issue at next year's annual meeting in July. Cllr Ian Greenwood, chair of the forum, said: ‘This is about risk, not box-ticking. ‘The recommendation that there should not be a concentration of power at the head of a company is in the Combined code because of previous governance failures. ‘In addition, there is a significant risk for investors that the decision to breach a key principle will send a message to the market as a whole. ‘As such, welcome as the company's recent letter is, it does not provide sufficient justification for us to support the proposed approach. ‘We want the focus to remain on the importance of good governance, rather than turning into a personal referendum on Sir Stuart Rose. ‘We are, therefore, exploring alternative routes to addressing our concerns.'
