M&S needs a streetsmart boss

THE abrupt departure of Luc Vandevelde as chairman of Marks & Spencer resolves nothing. In fact, it exposes the weaknesses of the M&S board, with its lack of City heavyweights and it leaves chief executive Roger Holmes directly in the firing line.

Now M&S has a real problem. It is one of several of Britain's top companies - including drugs giant GlaxoSmithKline, grocer J Sainsbury and WH Smith - which are hunting for a new chairman.

M&S has to be careful. Shareholders are now much less inclined to sign on one of the City's backscratching network, as was seen when Sir Ian Prosser was ignominiously rejected at Sainsbury.

The new M&S chairman will face mounting challenges. Chief executive Roger Holmes has failed to impress. The company has tried a series of increasingly desperate strategies to turn the business around, from tinkering with its Lifestore concept to launching pelmet skirts for teenagers. But while it fiddles around the edges, service and enthusiasm inside the stores is dwindling, the food offering (once so often ahead of the pack) is struggling and the shops need a facelift.

It is also clear that the final results, out later this month, will not be a pretty sight after the disastrous final-quarter sales.

So what kind of chairman does M&S need? It requires one who is hands on, not wandering off doing his own thing. But what it needs most is the traditional merchandising wisdom that was once the chief characteristic of M&S management.

The nominations committee, now headed by Misys chief Kevin Lomax, should forget fears that the boss might interfere with the chief executive. Sometimes that is necessary. And if it is decided that Holmes needs to go, so be it.

The company also needs to stop thinking of itself as the dowager of the High Street, above the fray of competition.

It needs a streetwise chairman who knows how to compete with the best of them like Stuart Rose or Philip Green - if he were not so busily engaged elsewhere.

A dull, safe pair of hands from the City would simply drive sales, earnings and the share price down further.

With a market capitalisation of £6.9bn at present, M&S may still be a little large for the private equity funds to digest. But if it drifts down further then the figures might start to add up.

There is cash to be made from squeezing the central bureaucracy to its core, maximising property values and axing the dividend.

The company had better put in a new chairman rapidly and one who will inspire confidence - or it will become a sitting duck.

Oil shock

JUST as the global economy looked set for the best growth of the new decade, along comes the oil price to crimp confidence.

Fears of higher energy prices feeding into strong inflation and of an end to the era of cheap money sent share prices tumbling on both sides of the Atlantic.

Markets in London and New York are spooked by the possibility that Middle East instability could do what it has done in the past and disturb prospects.

It was only last month that the International Monetary Fund was projecting global output growth of 4.6% this year, up from 3.9%.

But a tightening is taking place. Oil prices above $40 a barrel represent a tax on every consumer and business. Add the prospect of higher interest rates and you have a combustible mix.

The only positive is the apparent U-turn by Saudi oil minister Ali Naimi who is now calling on Opec to loosen the spigots at its next session on June 3. The Saudis, besieged by terrorism fears, have been under pressure from the White House to act. None of this was enough to prevent the Footsie from sliding 103 points and for the Dow to dip briefly below the 10,000 level for the first time since December.

President Bush must fear that his war on terror is rebounding on financial markets.

Speedy discipline

YOU have to hand it to the Accountants' Joint Disciplinary Committee. The speed at which they deliver justice to their members is accelerating. In 2003, 14 years after Asil Nadir's Polly Peck went down the plughole, discipline was delivered to the auditors responsible.

Now the accountants are penalising Andersen and its audit partners for their failure to detect fraud at DIY group Wickes - ten years after the event. Unfortunately, in the interim Andersen vanished in an Enron-induced puff of smoke.

At this rate of improvement, the next accountants to be caught up in a scandal can expect to be disciplined within five years at least. How chilling!