Morrisons faces boardroom revolt

Directors at Morrisons are threatening to quit over chairman Ken Morrison’s continued failure to appoint a new chief executive, it was reported today.

A number of non-executive directors will consider tendering their resignations if a new boss is not announced by the company’s annual meeting in May, The Sunday Telegraph reports. Four of Morrisons’ five non-executives have been at the company for less than 10 months.

“If there isn’t a chief executive by the AGM, there’ll be resignations. The directors can’t let themselves get tarnished over this,” a source told the paper.

This is just the latest round of an on-going boardroom battle following the UK’s fourth largest grocer’s acquisition of Safeway in 2004.

Last Year, David Jones, Morrisons’ senior non-executive director threatened to quit if the company failed to issue a profit warning.

It is understood that acrimony over the company’s slowness to appoint a successor to Bob Stott, the incumbent chief executive, sparked a row at a board meeting on Tuesday.

Tension was further heightened when Morrison, 74, told reporters that he hoped to still be at the company his father founded in 1899 in two to three years’ time. It was thought he would stand down earlier.

It is understood he wishes to appoint an internal candidate as Mr Stott’s successor. However, directors favour an external candidate.

The issue will head the agenda at Morrisons’ next board meeting on April 6.

Richard Pennycook, Morrisons’ finance director, told the paper the appointment of a chief executive was a “critically important decision”.

Last Thursday, Morrisons vowed to bounce back from the first annual loss in its 106-year history.

Unveiling a blueprint that includes £60m (€86.9m) of cost savings, Morrisons said there would be no redundancy programme as it would not replace staff who chose to leave its stores.

The long-awaited recovery plan was unveiled alongside losses of £312.9m (€453m) for the year to January 29 as Morrisons accounted for the cost of converting stores acquired in its £3bn (€4.3bn) takeover of Safeway.

The group took on 5.5 million new customers when it swallowed Safeway in 2004 and converted 220 of its stores.