News Column

Top two driven off AA's board

August 29, 2014

By Rob Davies, Daily Mail, London



Aug. 29--Shareholder groups last night warned of a corporate governance breakdown at the AA after chief executive Chris Jansen resigned two months after its stock market float.

The roadside assistance firm decided its boardroom was not big enough for both Jansen and executive chairman Bob Mackenzie, who led a management buy-in that accompanied the float.

Mackenzie told staff that 'there can only be one "leader" for the organisation', insisting the parting of ways had been amicable.

Jansen resigned with immediate effect, while finance director Andy Boland will also step down once a successor is found.

But groups that advise shareholders on how to exercise their voting power said the AA, which has 13m members, was lagging behind other listed firms in the way it handles its obligation to investors.

Governance group Pirc pointed out that it was against the Financial Reporting Council's guidelines for one person to serve as both chairman and chief executive.

'Pirc is of the view that good governance requires a clear separation between management and the board, which means clear separation of the roles of chief executive and chair of the board,' said a spokesman. 'They have vastly different responsibilities.'

Sources close to the company insisted that Mackenzie's dual role had been approved by the 'cornerstone' investors who took part in the AA's float. But fellow corporate governance body Manifest said the AA's corporate governance failings did not stop at the separation of boardroom roles. It reserved particular criticism for the lack of disclosure on the investor relations section of the company's website.

'The AA approach to disclosure is very poor and does not meet the minimum standard expected by investors,' said Manifest chief executive Sarah Wilson.

The website discloses no information about who serves on the board, nor does it contain any links to information about the company secretary or investor relations chief. An AA insider acknowledged the problem, saying it was the result of the group's 'accelerated' float and that a new investor relations website will be ready within a fortnight.

Despite the concerns, the AA's shares rose 2.25p to 278p, as they digested the simplified management structure.

Jansen will get his full annual salary of pounds sterling 600,000 for his work in the year to date, but is not expected to take part in a bonus scheme that could have handed him another pounds sterling 480,000. Boland will stay on while a new finance chief is found but will also be entitled to his full pounds sterling 400,000 salary if he is replaced before the end of the year.

In a letter to staff, Mackenzie, a former boss of AA rival Green Flag, said Jansen's resignation would avoid duplication of leadership roles, insisting that discussions had been 'positive and collaborative'. He said the his own leadership was a condition agreed with the 'cornerstone' investors who initially invested alongside Mackenzie and other members of the management team.

They include Aviva, Blackrock, CRMC, GLG Partners, Henderson Global, Henderson Volantis, Invesco, Legal & General and Lansdowne Partners.

'One of the conditions from our new shareholders was that I would take on the role of executive chairman and be responsible for running the business,' he said. 'At the time, Chris and I were aware of the implications on the chief executive role but we agreed to manage this situation in the best short-term interests of the AA.'

He added that 'there can only be one "leader" for the organisation'.

Jansen said he had agreed 'to find a new executive opportunity outside the AA', adding that he 'relished' his time with the self-styled fourth emergency service.

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(c)2014 Daily Mail (London, )

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Source: Daily Mail (London, England)


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