What Price Progress as Martin Sorrell bows out, BP's slick chairman and San Leon's return

Mark Kleinman
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SportAccord - Day 4
Sir Martin Sorrell stepped down from WPP in dramatic fashion last weekend (Source: Getty)

What Price Progress? That wasn’t the acronym Sir Martin Sorrell had in mind last weekend when he quit the company he serially reinvented over more than 30 years.

It may, though, have summarised the question posed by WPP Group’s less Sorrell-friendly board members in recent months.

Reimagining the conglomerate structure in an era of marketing disintermediation has been on WPP’s agenda for some time – you only have to look back at Sorrell’s own prognostications about the profound shifts in the global media landscape to see that.

But while it’s absurd to suggest that Sorrell was incapable of adapting the company again to an advertising age so at odds from the one in which he founded it, it’s equally inescapable that he had provided his enemies with potent ammunition when a real crisis arrived.

Read more: FCA contacts WPP to check if it breached laws

Persistent rows over his pay and a perceived disinclination to engage in serious discussion about succession left him with too few friends at a crucial moment.

Two predictions: Sorrell’s successor will not be any of the (largely nonsensical) names suggested this week; and the former WPP chief will not allow the messy events of the last fortnight to be the epitaph to an extraordinary career.

BP’s slick chairman

Onto another of the biggest vacancies in British business: City insiders say BP is nearing a final decision about Carl-Henric Svanberg’s successor, six months after announcing the Swede’s plan to retire this year.

For months, Douglas Flint, the former HSBC Holdings chairman, has looked like an obvious choice, partly because of his earlier six-year stint on BP’s board.

Now, though, that earlier tenure may have come to count against him – or, at least, it would do if the proposal from the Financial Reporting Council (FRC) to ‘time out’ independent directors who have been on boards for more than nine years.

Read more: BP boss Bob Dudley's 2017 pay package rose by 13 per cent

Flint stepped down from BP in 2011 after serving for six years. I understand that among the other names considered to replace Svanberg is Nils Andersen, the former Maersk chief executive, who already sits on BP’s board.

He has only been there for 18 months, meaning he would not be time-barred under the FRC’s code until 2025.

A seven-year appointment as chairman of a company as complex as BP seems more rational. There is, of course, the opportunity for BP to explain if it opts not to comply and appoint Flint anyway.

But if the former HSBC chairman does miss the cut, my money will switch to him succeeding Donald Brydon at the London Stock Exchange Group next year.

San Leon’s return

San Leon Energy doesn’t do things quickly. It’s not far short of six months since the Alternative Investment Market (Aim)-listed oil company suspended its shares

following a piece in this column about its interminable takeover discussions.

Under Aim rules, San Leon must resume trading by 3 May or (barring an extension) risk seeing its shares permanently delisted.

I’m told that progress is being made towards achieving that objective.

Read more: San Leon swung to loss last year

Talks with two Chinese groups about a takeover are, as San Leon said in January, no longer active, but discussions with Midwestern Oil & Gas, based in Nigeria, have been more protracted.

Under the prospective terms of a merger of San Leon and Midwestern, with the former’s shareholders holding 55 per cent of the combined company, the Aim-listed company’s implied value would be 77p-a-share.

Those talks may now also have come to nothing, but bear in mind that San Leon’s shares were suspended last November at just under 25p.

With the oil price now hovering around $70 a barrel, and San Leon’s reserves estimate, sources say, standing well ahead of previous disclosures, the shares look set to perform well – if they do ever start trading again, that is.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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