Shire investor objects to CEO shift

One of Shire's shareholders is crying foul at the drug maker's big management reshuffling 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 from the Financial Times

Suggested Articles

Mobile has become universal, accessible, and multi-generational. It’s time for life science brands to revolutionize how they’re telling their story.

Former Retrophin CEO was hoping for a SCOTUS hail mary to escape his seven-year fraud sentences Turns out the court was interest in hearing his plea.

A new investigation shines light on how Purdue pushed back on negative coverage of opioids, placed opioid-friendly experts in think tanks and more.