THE STAR OF WPP’s AGM today will not be there in person. Sir Martin Sorrell, the man who turned a wire shopping basket company into a massive, $20 billion advertising giant, resigned on 14th April after more than 30 years in charge. Like many outgoing chief execs, his absence will be felt.
The timing of the AGM is unfortunate. Two months after Sir Martin stepped down there are still questions that need answering. We’re still of unsure of why he stepped down, for example. There have been rumours as there always are. The FT has alleged that Sorrell was spotted entering a Mayfair address frequented by sex workers, and has also claimed he created a “toxic environment” and “fear culture” at the company HQ in addition to bullying junior staff. Sorrell has “strenuously” denied the claims. Another take has the WPP board, under Chairman Roberto Quarta, “assassinating” Sorrell after the company’s collapse in value since the beginning of 2017. But as we read that shareholders are expected to approve payments of up to £19 million over the next four years to Sorrell, they should know what happened.
It isn’t just about satisfying curiosity. Though there will undoubtedly be people hoping for something salacious to emerge about Sorrell in the next few days, the hope for juicy gossip isn’t why some transparency is in order. The board’s handling of Sorrell’s departure looks more and more shady. Investors are still in the dark. But most of all, the clandestine nature of this affair is bad for the City. Rumours abound. The use of non-disclosure agreements to control the spread of information is reminiscent of the kind of secrecy that use to plague the financial sector before the crisis in 2007-2008. Shareholders in WPP have reportedly called for an overhaul of the entire board simply for allowing Sir Martin to sign an NDA and ignore crucial questions about his departure. One shareholder told Financial News that “the board should never have allowed this to happen. They are culpable for the lack of information that has been communicated to the market.” They added that the company “needs as strong board––one that can ask tough questions, not the one it has.”
The lack of clarity surrounding Sorrell’s departure, and what it means for the business landscape, has also not been lost on more high-profile commentators. Liberal Democrat leader and former business secretary Vince Cable said it was “clear that WPP must publish the report into Sorrell’s departure, if for no other reason than to stop any more rumours.” He went on: “Shareholders should not be kept in the dark. WPP and Sorrell can help prevent a return to that damaging environment [the pre-crisis City of London] by putting NDAs and secrecy to one side.”
I’ve been in the reputation management game for decades and I’ve watched Sir Martin Sorrell’s career closely. He’s even been on my podcast. Clearly he’s brilliant and what he does and a shrewd operator. But the findings from WPP’s inquiry into Sorrell’s alleged behaviour will come out, one way or another. Sorrell is too well known, WPP is too well known, and there are too many people interested in the story for it simply to go away. It is in Sir Martin’s interests to do what any good reputation manager would advise: be open and control the narrative. The rumours have to end, the fears of shareholders must be abated and it must be shown that the days of secretive dealings at Britain’s largest companies is over.