Tesco brought some relief to its unhappy investors yesterday after announcing that it had beefed up its board by hiring the chief executive of catering giant Compass and the former boss of Ikea.
The embattled retailer said Richard Cousins, a turnaround specialist who had led Compass since 2006, and Mikael Ohlsson, who was chief executive and president of Ikea until last year, would join as non-executive directors on 1 November.
Shares in the supermarket chain edged 2.4 per cent higher yesterday after having almost halved this year on the back of sliding sales, profit warnings and the discovery last month of accounting error that led it to overstate profits by £250m.
Analyst welcomed the news but predicted more changes to the board as Tesco seeks to restore its credibility and address criticism for lacking retail experience on its board.
“Non-executives rarely put pennies into the tills but in this instance we welcome the joint appointments and hope that it represents the recommencement of more effective governance of Tesco,” Shore Capital’s Clive Black said.
He added that he saw scope for more executives, more changes to the non-executives and “the appointment of an appropriate chair person” to replace Sir Richard Broadbent, who has been under pressure to resign.
Ex-Asda boss Archie Norman, City veteran John Gildersleeve and even Cousins have been tipped as possible successors. It has also been suggested that longer-serving members, such as Ken Hanna, may step down to make way for new non-executives.
TESCO’S NEW NON-EXECUTIVE DIRECTORS
Mikael Ohlsson’s experience of running the world’s largest furniture retailer with a presence in over 26 countries is likely to come in handy for Tesco. The retail veteran began his career at Ikea 35 years ago as a carpet salesman before becoming a store manager two years later. He landed his first role as country manager role in 1988 for Ikea in Belgium, moving to Canada in 1991 before taking over as managing director for Sweden four years later. The guitar-playing photography enthusiast became chief executive in 2009 before stepping down last year. He also serves on the board of car maker Volvo and industrial group Lindéngruppen.
Shares at Compass have soared nearly 300 per cent since Richard Cousins took over as chief executive in 2006 and Tesco’s shareholders will be hoping that he can perform similar feats at Tesco. As well as leading one of the world’s biggest caterers, Cousins was also non-executive director of consumer goods group Reckitt Benckiser from 2009 until May this year and of HBOS and Bank of Scotland from 2007 to 2009. The 55 year-old earned his reputation for turning around businesses during his time as chief executive at BPB. Under his leadership, the building materials group’s market value grew from £1bn to £4bn.