Professor Andre Spicer comments on a new sensitivity in CEO’s

THE MANNER of Justin King's departure from Sainsbury's shows a new sensitivity to the image of greedy fat cat bosses, says Professor Andre Spicer of Cass Business School.

 

Justin King is leaving at about the right time. CEOs who step down too early or too late have a negative effect on company performance after they leave. His departure will create some uncertainty among investors, reflected in the wobbly share price. It might also create a sense of loss among some employees. Given King has been in post for some time, he may cast a shadow over his successor. Mike Coupe faces a tough challenge of navigating between trying to live up to King's legacy or trying to create a break. Either task is going to be tough.

 

The decision to go in-house for a new CEO is an excellent idea. It might not give some analysts the scent of fresh blood they might hope for, but it will mean he has a detailed knowledge of internal problems and opportunities within the firm. The appointment signals a wise gradual approach rather than a radical rupture. Too often outside appointments boost share prices in the short term, but implement generic strategies which do not fit their new company, damaging performance in the long term.

 

King's decision to shun various post position perks shows a new sensitivity among senior leaders to the image of greedy fat cat bosses. It signals recognition that excessive executive perks have soured many members of the public, who also shop in his company’s stores and own company shares.

 

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