Sir Peter and his governent role

WHEN Sainsbury boss Sir Peter Davis sits down to lunch today at his Elizabethan manor in Hertfordshire, he will have more than Jamie Oliver's gourmet trimmings to distract him.

Davis, halfway through the monumental task of reviving the fortunes of what was once Britain's premier grocery chain, has been asked to head a major Government inquiry into the role of non-executive directors.

Trade Secretary Patricia Hewitt, rattled by boardroom failures implicit in corporate meltdowns such as Enron and Marconi, has ordered a review of the role of those who are meant to keep an eye on executive directors.

Davis, one of the most respected company bosses, is an obvious choice to lead the inquiry. But he knows that any plaudits from the Government for his efforts could be undermined if he takes his eye off the ball at Sainsbury.

Already, several big shareholders have told the company they don't want Davis to take on such a high-profile task while his day job is still so demanding. One leading fund manager told Financial Mail: 'We don't reckon it's a good idea unless he can be very sure it will not deflect him from his role at Sainsbury.'

Colleagues say that Davis has no intention of accepting what could well turn out to be a poisoned chalice without consulting colleagues and big shareholders. Friends also point out that Davis, who headed a Government task force into welfare to work, has shed all but one of his other directorships, leaving him with some spare time.

But the omens are not good. Corporate Britain is littered with the remains of once-healthy companies whose chief executives were lured to spearhead Government reviews into everything from fat-cat pay to defence procurement and the purchase of wine.

Davis should study what happened to two leading executives who headed previous inquiries into corporate governance.

When Sir Richard Greenbury, former chairman and chief executive of Marks & Spencer, agreed - albeit reluctantly - to review executive pay, company's fortunes were riding high. But he made no secret of the fact that he found the scrutiny of his business and private life almost intolerable while he was conducting his inquiry.

His recommendations were published in 1995. And within three years, the curse that has hit so many heads of task forces and official inquiries had struck - M&S was on the slide. From reporting profits of more than £1bn, Greenbury stunned the City by describing the High Street as a 'bloodbath' towards the end of 1998. A year later, he quit after a spectacular boardroom row.

Sir Ronnie Hampel's experience of heading a review into corporate standards shortly afterwards was hardly happier. Shares in ICI, where he was executive chairman, slumped while his attention was focused on the problems of other boardrooms. Arguably, the company has never recovered.

Lord Simpson and John Mayo of Marconi were invited into the Tony Blair tent before the company collapsed around them.

One fund manager said: 'You wonder whether full-time executives can take on these big inquiries, especially as so many have nonexecutive directorships with other companies.'

Not long after he led the welfareto-work inquiry, Davis had to apologise for the long-running pensions mis-selling debacle at Prudential, where he was then chief executive.

Others, notably Terry Leahy of Tesco, have led inquiries with no fallout, but they are the exceptions.

Robert Ayling, the former boss of British Airways, took on a task force role and was also heavily involved with the ill-fated Millennium Dome. By the time his Government duties were ending, the airline had hit severe turbulence and Ayling was ejected.

A similar fate befell Barclays boss Martin Taylor, who headed a task force on welfare reform. A boardroom bust-up and the refusal of fellow directors to fall in with his plans for the bank led to Taylor's abrupt departure. As Davis mulls over his decision, he will be acutely aware that one of his predecessors at Sainsbury, David Sainsbury, was heavily involved with Government projects as the company's fortunes slumped.

Friends say Davis will almost certainly reach a decision in the next few days. 'When the Government wants such a major task undertaken, it doesn't want to be kept waiting,' said one.

It is inconceivable that Davis will stick his neck out without the explicit backing of directors and shareholders. His desire to spearhead a review into what he regards as a crucial issue for the future of business may be strong. And he may even have his eye on swapping his knighthood for a peerage.

But for Davis, perhaps the greatest prize of all would be to retire in a couple of years as head of Britain's most successful grocer.