Stuart Rose has won the acclaim of ordinary shareholders and institutional investors alike as CEO of Marks and Spencers. But his move to take on the powers of Chairman and Chief Executive has not been so widely approved. Is this a modern-day Beethoven effect?
Music lovers are brought up on the tale of Beethoven’s admiration of Napoleon and how it turned to wrath when Napoleon declared himself Emperor of France.
A work originally entitled “Bonaparte Symphony” … was renamed when Bonaparte crowned himself emperor, a move which angered Beethoven. As legend has it, the composer ripped through the title page and later renamed the symphony the Eroica, refusing to dedicate one of his pieces to the man he now considered a “tyrant”.
When Business Leaders fall …
The fall of a Business Leader can also be accompanied by a rapid flip ‘from hero to zero’ , as many case examples in LWD have illustrated. Recently a spate of examples accompanied the fall of failed financial executives such as Fred Goodwin.
The hero-to-zero effect in some ways is a throwback to the days of The Great Leader, a period during which charismatic personality was believed to be the driving force behind transformational change.
The Governance Issue
There has been uneasiness about the joint role since last year’s AGM. However, despite continued turbulent times in the retail sector, Sir Stuart’s track-record as entrepreneurial leader remains relatively intact.
At this week’s AGM he retained considerable support, although the Governance issue will not go away.
Sir Stuart has been under pressure from institutional investors for more than a year over the board’s controversial decision to allow him to hold the roles of chairman and chief executive, which is against best corporate governance.
[One] said if Sir Stuart were to stand down early as chairman, he should consider leaving the board altogether. Sir Stuart’s urbane response was to say he was “a servant of the board. If they wish me to stay I will be here until the latest July 2011.”
The Universities Superannuation Scheme called for Sir David Michels, deputy chairman and senior independent director to be made chairman at least on an interim basis. “If Sir David would become the chairman, and I would become the chief executive, it’s moving . . . back to the past,” Sir Stuart replied. And while Sir Stuart could charm the audience, he could not escape the words of Councillor Ian Greenwood, urging support for a motion for him to hand back [the Chairmanship] “Whatever happens we are not going away.”
The Wider Issues
Students of leadership will recognise the wider issues implied in the ongoing story of Sir Stuart Rose’s leadership. At one level there is the technical matter of corporate governanace. At another level these is the process through which a powerful leader appears to seize greater powers ‘in the interests of the company or country’.
In other words, the Beethoven effect.
Close examination of the Beethoven image reveals it to be an ironic comment on the great man’s coiffure, to be found on a blogpost by Charlie White