The question was asked of Tesco when the company got into trouble with The Financial Conduct Authority over an estimated £250m overstatement of its expected profits this year. And let’s not forget the jet scandal as shares fell and a new corporate plane turns up worth $50 million.
There had to be a reshuffle to rally investors and so far five members of the Board have already been asked to leave: Kevin Grace, commercial director; Chris Bush, UK managing director; Carl Rogberg, UK finance director; John Scouler, food commercial director; and Matt Simister, sourcing.
And so far Tesco have brought in two big guns from the retail sector: Richard Cousins, chief executive of contract caterer Compass; and Mikael Ohlsson, with 30 years’ service at IKEA home furnishers.
With investors looking to the Interim Results Announcement 2014/15 due out on 23 October, a process of discussions is also about to commence between shareholders and the Board. Facilitated by Patrick Cescau, senior non-executive director, the main point on the agenda will be the reshaping of the Board alongside possible talks on the sale of Dunnhumby, the marketing service and Clubcard Loyalty Scheme, a Tesco subsidiary worth £2 billion that private equity firm TPG is reported to be viewing for acquisition.
On 19 September shares started to plummet, from £229.60 down to £172.15 by Monday 6 October. However, in the last 2 days, the obvious efforts by Tesco to appease the markets lifted shares up by 3.5 percent to £182.95.
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