Lord Maurice Saatchi has stepped down as executive director of the advertising agency he founded, a week after the firm’s shares imploded on the back of a major profit warning.
Fellow Conservative grandee Lord Dobbs, Sir Michael Peat, Prince Charles’ former private secretary, and City legend Lorna Tilbian also resigned from the board.
City A.M. understands that the decision was taken as a result of a number of disagreements between members of the eight person board.
Chief executive David Kershaw had offered to resign, but was told that this was not in the company’s interest.
On 4 December the legendary Golden Square firm admitted an £11.6m accounting error after PwC conducted an independent review.
In August the company had said that the charge would be £6.4m.
The combination of the error, as well as a lower profit forecast, sent shares at the company tumbling.
M&C Saatchi’s share price fell to 79p on the back of the news, nearly halving the firm’s market capitalisation.
Since March, when shares were trading at nearly £4, the embattled company has lost nearly three-quarters of its value.
Chairman Jeremy Sinclair said: “We have accepted the decision of these directors to resign.
“We are determined to restore the operational performance and profitability of the business and are already implementing all of the recommendations set out in the PwC report we announced last week.
“We had started a process to reconstruct our board with new independent directors. This new board will have a mandate to conduct a full review of all aspects of our governance.”