UK: Corporate governance, M&S style

The UK's Combined Code on Corporate Governance, provides: "The roles of chairman and chief executive should not be exercised by the same individual". Companies can decide otherwise, providing disclosure is made: this is the principle of "comply or explain" which underpins the Code.

Against this background, strong disquiet has followed Marks and Spencer's recent announcement that Sir Stuart Rose will become executive chairman of the company, in breach of the Code. M&S's institutional investors are reported to be divided on this change in board structure and, surprisingly, M&S appears to have mishandled the way in which institutional investors were consulted and advised. The Times newspaper reported that M&S's second largest shareholder, Legal and General, was given an hour's notice of the change.