How does this work? The board of a FTSE 100 company launches an inquiry into allegations of “personal misconduct” against its chief executive. It goes to great lengths to show it is doing things by the book by hiring an outside legal firm to conduct the investigation and retaining two others to act as advisers.
Then, before a meeting of the directors to consider the findings of the inquiry, the chief executive resigns, despite having rejected the allegations “unreservedly”. The board deems the departure to be a retirement, meaning the executive can keep an incentive package worth up to £20m, and the company vows that the details of the investigation will never be disclosed.
To put it mildly, the WPP board’s handling of Sir Martin Sorrell’s exit seems confused. We may never know who leaked the fact of the inquiry, but, once the lid had been opened, the anxiety to keep the findings secret looks questionable. Adherence to process seems to have lasted only as long as it was useful to do so. If the chairman, Roberto Quarta, comes under pressure from shareholders to say more, he cannot complain. Investors have been left in the dark.
At a push, one could say Quarta is being commercially pragmatic. Why risk handing ammunition to rivals to lure WPP clients? Maybe, but the messy and unexplained exit of the boss of 33 years’ standing creates problems of its own. Even now, Sorrell is “available to assist with the transition”, says WPP, yet the founder signed off his email to staff with an ambiguous “back to the future” pledge. Did he mean he wants to get back into the advertising business under his own steam? If so, matters could become yet more complicated if Sorrell sets up in competition or bids for parts of the old empire.
For more read the full of article at The Guardian
