Wetherspoon boss hits out at Britain’s corporate governance rules
Tim Martin says nine-year rule is deeply flawed and accuses his pub’s biggest shareholder of hypocrisy
JD Wetherspoon founder and chairman Tim Martin has accused his two main shareholders of hypocrisy over corporate governance issues.
Martin slammed his largest institutional shareholder Columbia Threadneedle Investments and BlackRock, for failing to support his non-executive directors because they had been on the board for too long. The UK government code states that non-exectuive directors are limited to nine years’ service.
The pro-Brexit pub chain owner pointed out that both companies had equally long-serving directors of their own – or their parent company’s – boards.
He criticised the UK’s corporate governance rules, saying: “There can be little doubt that the current system has directly led to the failure or chronic underperformance of many businesses, including banks, supermarkets, and pubs.” His comments came in a trading update, which reported a 5.3 per cent increase in like-for-like sales in the 13 weeks to 27 October.
It’s not the first time Martin has spoken out about the rules, calling the system, “a threat to listed companies — and therefore to the UK economy.”
In his note he added, “A cursory glance at the board compositions of major UK PLCs underlines the issues. Tesco, for example, which has 450,000 employees and is the UK’s largest supermarket group, has only two executive directors, with total service of about nine years and 11 NEDs with total service of 38 years. The overall average, including NEDs and executives, is only 3.7 years. This sort of corporate structure is mirrored in banks, retailers and pubs – where long-term performance, over recent decades, has usually veered between poor and catastrophic.”
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