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Tenon chairman steps down after three months

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30th Apr 2012
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RSM Tenon group chairman Adrian Martin and non-executive director Michael Findlay will leave the company’s board after just three months into the job.

In an announcement on the London Stock Exchange, the firm revealed that Martin and Findlay would be leaving the board after having established a new management team.

Investors were told: “this is an opportune moment for a new chairman to take the company forward over the long term.”

Martin will remain in his position until a suitable replacement is found, while Findlay will step down at the end of May to re-join Bank of America Merrill Lynch.

Martin and Findlay joined the board following the resignation of chairman and chief executive Bob Morton and Andy Raynor in January. In his earlier career, Martin served as managing partner of BDO Stoy Hayward between 1991 and 2000. 

Chris Merry, chief executive of RSM Tenon, spoke to AccountingWEB and explained why the process to appoint new board members was now "well underway".

While both men “really stepped up to support the business and to stabilise it”, he said Findlay was not be able to carry on in his non-executive role alongside his Merrill Lynch executive appointment. “Unfortunately he has got to step down and concentrate at least 110% on his Merrill Lynch role. It's just one of those things.”

On the departure of Martin, he said he believed he had made “sufficient progress” and that it was the right time to appoint a new chairman to take the business into its next stage of development.

Questioned on whether the appointment of Martin was a “temporary” role from the outset, Merry said it wasn't necessarily something that was articulated, but that it was good that he was able to step up to chairman. “He took on the role of executive chairman for the first few weeks until I was appointed,” Merry said, “and it's a natural step with a company that has a blip as we've had, that you see some structure changes to the board to move into its next phase. It may sound slightly perverse, but it's a vote of confidence that with the new executive team in place we're going in the right direction and now is the time to make the changes at the PLC level.”

Merry became chief executive in February, shortly before the company confirmed plans to cut employee numbers by 10%. The restructuring programme was announced after Tenon posted a loss on continuing operations of £70.6m for the last six months of the year.

Earlier this month RSM Tenon and its auditors PwC were in a row over the quality of the firm’s auditing. According to The Times, the Accountancy & Actuarial Discipline Board (AADB) was a “matter of weeks away” from an inquiry into the audit work carried out by PwC in relation to Tenon.

At the time of Morton and Raynor’s departures, Tenon said it was conducting a review which may lead to “restatements of its accounts” to 30 June 2011 as a prior-year adjustment as well as to incur certain “non-recurring, non-cash charges” in the last six months of the year that were not included in additional expectations.

Merry explained to AccountingWEB in more detail the circumstances around its results announcement in February: “We were very clear that the challenge has been a cost base that grew more quickly than revenue, particularly after the acquisitions that took place in 2009/2010. We made it clear that while we have put in place elements of integration of businesses acquired, that integration didn't go far enough and therefore left too much cost for the business.”

“The first thing we did was to put in place a number of cost cuts particularly around people, so we announced we were reducing our headcount by around 10% which is about 300 people and that should save us about £14m per year. We're trying to get that done by the end of the financial year in June and we're on track to do that.”

Merry added: “Our first priority is our clients and serving our clients. So the impetus is to provide them with what they need, the right service, and in the right places.”

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