Boots confirms succession hunt
Search for new chief executive ‘proceeding well’
December 16 2002
The Boots Company has confirmed that it is actively seeking a replacement for chief executive Steve Russell.
In a statement designed to end several days of press speculation Boots chairman John McGrath said that a successor to Russell is likely to be announced shortly. McGrath also indicated that he will step down at the company’s next AGM in July 2003, in favour of vice-chairman Sir Nigel Rudd.
McGrath said: “For several months the issue of succession at Boots has been under consideration. It was my view, supported by the non-executives, that we should accelerate the succession process in order to drive strategic change faster. Accordingly, I initiated a search to identify a successor to Steve Russell. This search was undertaken with the full knowledge and support of Steve.
“The search is proceeding well and, subject to a suitable candidate emerging and being approved by the Board, we would expect to identify a new chief executive in the near future. Steve will remain in his current role until a successor is found.”
Reports have suggested that Stuart Rose, who steps down as Arcadia chief executive this week following sale of the fashion retail business to Philip Green, is the front runner to replace Russell. Sara Weller of Sainsbury’s and Tim Mason, of Tesco have also been named as potential candidates
McGrath continued: “Steve has made a substantial contribution to Boots over many years and in many roles. As chief executive he has tackled many of the structural and organisational issues he inherited: in particular by bolstering the senior management team with appointments from outside the company. The performance of our stores has been steadily improving throughout this year and I am confident we have prepared well for the current Christmas trading period. It is also to his considerable credit that he is supportive in this process. The shareholders and staff of Boots have much to thank him for.”
On his own position, McGrath said: “My term as chairman runs until the end of July 2003 when I will be 65. It is my intention to see through the succession process and chair the next AGM. In due course the Board will choose my successor. It will be my recommendation that Sir Nigel Rudd, currently deputy chairman, be appointed.”
Boots has faced increased competition in its core health & beauty business from supermarkets. The government is also currently considering a report which is likely to recommend a relaxation of the pharmacy regulations. In response, Russell has overseen a store and product revamp and the launch of additional healthcare services such as dentistry and laser eye surgery under the Wellbeing brand.
However, there has been concern among investors that more needs to be done to protect Boots’ market position.
