Blog: Dean BestKnitting and thermal undies - the M&S AGM

Dean Best | 9 July 2009

Knitting, thermal underwear and the gents toilets in Weston-super-Mare.

Forget the controversy over corporate governance and Sir Stuart Rose's dual exective role at Marks and Spencer - shareholder delegates at the UK retailer's AGM yesterday afternoon (8 July) had more pressing matters on their minds.

M&S's small shareholders packed into a sweltering Royal Festival Hall in London to hear Sir Stuart outline his strategy for getting the upmarket retailer through the recession - and also to mount the soapbox and tell the M&S boss where he was going wrong. Or right.

In the lead up to the AGM, the UK business press had been busy discussing some investor concern over Sir Stuart's role as executive chairman and its contravention of corporate governance guidelines.

However, those expecting a fiery investor meeting were disappointed. In the end, it all seemed a rather, well, British affair, which on reflection, should have been expected, given M&S's role as bastion of the High Street and of middle England.

A resolution calling for Sir Stuart to be replaced as chairman within a year was put forward. The resolution itself was tabled in a very polite way - with sponsor Councillor Ian Greenwood insisting it was "a difference in principle, not a difference of personality".

However, a loyal 62% of shareholders backed Sir Stuart and the M&S board and he will now carry on as chairman until July 2011 in order, the M&S boss said, to have "an orderly transititon".

Some of the more pointed questions fired at the M&S chief concerned the lack of "thermal underwear for gentleman" and the state of the toilets at a branch in the west of England.

The rebel investment funds would have been disappointed. But, as one Sir Stuart supporter insisted, his critics in the City "couldn't run a bath".

For one shareholder, however, the afternoon's events just seemed the perfect backdrop for her to get on with one of her hobbies. She didn't stop knitting all afternoon.

The tone of the M&S AGM raises an interesting question concerning the calibre of M&S shareholders.

The retailer has a core of 'loyal' small shareholders, people who have invested their retirement savings in the company. This group obviously has a lot of faith in the M&S brand – indeed many are perhaps even shareholders because of it.

As such, perhaps it is not overstating matters to suggest that these mainstay M&S investors help bolster the group’s share price, providing a degree of stability. If any other company was reporting the dire results we have seen from M&S of late and struggling to prove that it is relevant to today’s changing British High Street, we would perhaps expect to see greater downward movement in the share price.

So, pension funds can continue to harp on about corporate governance, the rest of M&S’s shareholders have more pressing concerns – they might drop a stitch in their knitting.


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