Morrison 'shot the messenger', says ABI

The Sunday Telegraph  17 April 2005

The Association of British Insurers has condemned the ousting of Wm Morrison's finance director, Martin Ackroyd, as a case of 'shooting the messenger' that fails to address the supermarket group's problems.

Ackroyd signalled his intention to step down from Morrison three weeks ago, after 18 years in the post, shortly after a profits warning. Investors are concerned that he has become a "scapegoat" for the retailer's troubles since it bought Safeway for £3.3bn last year.

The ABI's criticism of Ackroyd's move comes amid growing concerns that finance directors are increasingly bearing the brunt for wider problems within companies. In the past 14 weeks, eight FTSE 100 finance directors have been ousted or quit.

Peter Montagnon, head of investment affairs at the ABI, told The Sunday Telegraph: "We were a bit disappointed by the knee-jerk reaction that the finance director had got to go at Morrison. This … was a pretty clear case of shooting the messenger."

Montagnon was concerned that analysts and investors focus "on the numbers" rather than longer-term strategies, and are too quick to call for a finance director's head.

Ackroyd is one of five finance directors to leave FTSE 100 companies this year following poor performance. The others are: Roger Payne at Rentokil, Roger Matthews from J Sainsbury, Alison Reed at Marks & Spencer and Howard Dodd from Boots.

Sarah Wilson, the managing director of the shareholder group Manifest, also raised concerns over Ackroyd's departure. "The FD was blamed for poor trading," she said. "I disagree. I think the FD was the fall guy.

"These people [finance directors] are responsible for communicating the numbers to the City. We are concerned that … the FDs are the sacrificial chaps and chapesses who fall on their swords instead of the chief executives.

"Some people seem to think that: 'If the numbers are bad it must be the FD's fault, as the numbers belong to the FD.' "

Montagnon and Wilson said it was too early in the annual general meeting season to identify clear corporate governance trends, but stressed that they would closely monitor the treatment of finance directors.

Wilson said that ousting finance directors is less painful than axing chief executives. "It is certainly easier to find finance directors than chief executives," she said.

Montgagnon also warned that the responsibilities of finance directors have grown dramatically given increasing accounting regulations.

"A finance director's life has generally become much harder," Montagnon said. "We have got to be a little bit careful that we are not imposing on people what is effectively an impossible job."

But finance directors, the most powerful executives after chief executives, are also strong candidates for the top job.

Mark Tucker, the finance director at HBOS, is to become chief executive of Prudential next month. In February Ian Livingston, previously the finance director of BT Group, became chief executive of BT Retail, the telecom giant's consumer business.

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