BAT's Chairman Choice Risks Controversy

Source from:  Financial Times 08/17/2009

British American Tobacco is to risk controversy by appointing as chairman a former governor of the Bank of Ireland. Richard Burrows will take on one of the most powerful roles in British business when his position at the world's second biggest cigarette maker is confirmed later this week. Mr Burrows resigned from Bank of Ireland at its annual meeting in May after being forced to apologise for falling profits and share prices. The bank has been badly hit by the financial crisis and received support from the state. "I apologise to our stockholders for the loss in value of their stock and for the cancellation of dividends," he told investors at the bank's annual meeting. "Accountability for these losses must be taken at the top and, accordingly, I have informed my fellow directors of my personal decision to stand down from the court." Some investors have been reluctant to see board members of banks that have been rescued by tax payers taking key positions at other companies. The decision by Alliance Boots, the retail chain, to hire Andy Hornby, who led HBOS into its forced merger with Lloyds TSB, was widely criticised. However, BAT's biggest investors are said to have accepted that Mr Burrows is an experienced boardroom operator. Mr Burrows was a former chief executive of Pernod Ricard, the drinks company, and now holds board positions at Carlsberg and Rentokil Initial, the pest control group. In Ireland, Mr Burrows was best known for his role as the former chief executive of Irish Distillers, a position that he held for 22 years, and during which time he pioneered the global expansion of Jameson whisky. BAT, whose brands include Lucky Strike, Dunhill and Kent, is among the top 10 quoted companies in the FTSE 100. It employs 56,000 workers and has 49 factories in 41 countries. It operates in 180 markets and is the most international of all the tobacco companies. BAT reported a 16 per cent rise in first-half profits at the end of July driven by an increase in cigarette prices and recent acquisitions. Pre-tax profits at BAT in the first half of the year rose from £1.8bn ($2.9bn) to £2.1bn and revenue was up by 24 per cent, from £5.5bn to £6.8bn. BAT declined to comment on Sunday. Enditem