One of Shire's shareholders is crying foul at the drug maker's big management reshuffling [1] announced last week. You'll recall that Shire tapped its current CEO as non-executive chairman and promoted its CFO to CEO, effective in June. The Association of British Insurers, however, says the moves may amount to a breach of the UK's best governance practices. Worse, it may herald a downturn in Shire's fortunes.
ABI director of investment affairs, Peter Montagnon, said that the organization did talk to Shire ahead of the announcement, but it didn't approve the moves. A non-executive chair is supposed to be a check on company officials' strategies, so if the chairman was the CEO who developed the strategy, "he is supervising himself," Montagnon said. "There are risks in that." Other companies that have elevated their CEOs to chairman "did not perform terribly well," Montagnon added.
ABI members own about one-fifth of Shire's equity. Next step? Polling those members to see whether they object to the moves.
- read the report [2] from the Financial Times
Related Articles:
Shire surprises by tapping new CEO. Report [1]
New guard takes over Big Pharma. Report [3]
Shire on lookout for acquisitions. Report [4]
Shire to Massachusetts: Pass incentive bill now. Report [5]
Links:
[1] http://www.fiercepharma.com/story/shire-surprises-tapping-new-ceo/2007-12-13
[2] http://www.ft.com/cms/s/0/8179a7c8-aa84-11dc-a779-0000779fd2ac.html
[3] http://www.fiercepharma.com/story/new-guard-takes-over-big-pharma/2007-11-02?utm_medium=nl&utm_source=link
[4] http://www.fiercepharma.com/story/shire-lookout-acquisitions/2007-11-02
[5] http://www.fiercebiotech.com/story/shire-massachusetts-pass-incentive-bill-now/2007-08-31