easyJet accused of "severe" boardroom failings - Gaurdian Article.

[Wig Wag]

Stunning article in the Gaurdian today.. .. .Read On:. .. .<a href="http://www.guardian.co.uk/business/story/0,3604,668390,00.html" target="_blank">http://www.guardian.co.uk/busine ss/story/0,3604,668390,00.html</a>. . . . <small>[ 16 March 2002, 12:17: Message edited by: Wig Wag ]</small>

[Slim20]

I think the fact that about three shareholders attended the AGM shows how concerned the "minority shareholders" are about easyJet's board appointments......

[MarkD]

Much more interesting than that is the article that New Labour are going to allow the Maxwell brothers be directors - well after Mandelson everyone thinks they should have a second go, maybe Graham Rix will be allowed coach a girl's school next.. .. .If I were an EZY shareholder I'd fear the fact that someone from KPN is on the board - they managed to screw the Irish phone company [eircom] through stunning feats of corporate sleeping at the wheel...

[Self Loading Freight]

Bloody journos, eh? Can't get anything right. Unprofessional bunch of.... .. .oh, sorry. Wrong thread. <img border="0" title="" alt="[Wink]" src="wink.gif" /> . .. .R

[t'aint natural]

Makes one wonder whether CIS has a shareholding in British Airways, and what their concerns might be there.

[Fly_Right]

Methinks CIS is trying to drum up some "governance" business...whatever that is.

[phd]

Fly Right - 'corporate governance' is about running your business professionally, ethically legally, and safely. Some companies that have not managed to do this recently which spring to mind include Enron, Allied Irish Bank, Barings Bank, Railtrack, Independent Insurance, London Underground, Exxon, etc. etc. etc. Some of these companies have paid the ultimate price and are no longer in business - the others have learned their lesson the hard way. Boards of Directors of stock market listed companies are nowadays expected to comply with the guidelines for managing business risks (operational, financial, environmental and human risks) as set out in the Combined Code on Corporate Governance prepared by the Turnbull Committee following the Barings collapse. Those that do not meet these standards are flying on a wing and a prayer and may be inline for a wheels up landing. I wish EZY and Stelios every success but companies must learn the lessons of history and control their business risks properly if they are to survive and prosper.

[brabazon]

Fishbed. .. .Thanks for your succinct explanation of the importance of Corporate Governance, as you say it's particularly been shown in the recent cases with the railways that not enough attention was paid to this area. All organisations, including airlines, should be aware of the Combined Code and the board "should maintain a sound system of internal control to safeguard shareholders' investments and the company's assets", they should review this annually and include a statement of Corporate Governance in their Annual Report.

[Rob_L]

Correct me if I am wrong but CIS is an insurance company. I suppose as they are obviously whiter than white they have not been party to the pensions miss-selling scandal, they have not lost millions for their ISA investors and their with- profits insurance policies are going to pay out what they promissed to their customers.. .. .I wish Stelios had asked me for a sub when he was starting up!!!!!!!!!. .. .UK insurance companies have creamed there customers over the last few years and it isn't getting any better. Keep going Stelios , lets face it if a 10 year old schoolgirl can make better investment decisions than professional fund managers who gives a rats about their opinions.

[Rob_L]

Noticed that easyJet won the "Top Management Team". .award at a competition sponsored by the Guardian newspaper and Cranfield School of management.. .The Eden project won top prize and CIS insurance. .won er....... not a lot.

[nigelhayes5000]

That sounds like it was fixed!!

[Stelios]

This whole thing is just the tip of the iceberg.. .Beware all you Orange People.

[Wig Wag]

From the BBC news 18th April:-

Entrepreneur Stelios Haji-Ioannou is to step down as chairman of budget airline EasyJet.
The high-profile businessman set up the company in 1995, and it was floated on the stock market five years later.

Mr Haji-Ioannou will remain as chairman of other companies in the Easy empire, including the EasyEverything internet cafe chain and EasyRentacar.

He will be replaced by Sir Colin Chandler, who is currently chairman of Vickers Defence Systems

Shareholder pressure

Mr Haji-Ioannou said he would step down in two years time.

He added that he would retain a significant stake in easyJet "for a very long time" but said his strengths lay in being a "serial entrepreneur" rather than the chairman of a public company.

His move follows pressure from major shareholders, who generally prefer chairmen to be less intimately involved with a company.

Stelios Haji-Ioannou himself says the City is littered with company founders who held on to their creations for too long.

The no-frills airline recently reported a sharp increase in passenger numbers, up 39% on the same period one year ago.

Along with other budget carriers, EasyJet has escaped the worst of the international slump in the aviation industry following the 11 September attacks in the US.

[avt100]

An entrepreneur needs to combine the daring of a swashbuckler and a flair for the eye-catching publicity stunt.
Stelios Haji-Ioannou had those qualities by the bucketful. Where others such as Freddie Laker had failed, Mr Haji-Ioannou, has succeeded. The Greek son of a millionaire started easyJet out of Luton airport in 1995 with two leased Boeing 737s, offering flights to Edinburgh for £29. By the time it was listed on the London stock exchange in 2000, it was worth £860m, giving Mr Haji-Ioannou a personal fortune of £280m.

Along the way came some entertaining PR wheezes. When British Airways launched Go, for example, Mr Haji-Ioannou booked himself and some employees, all dressed in their orange uniforms, onto the inaugural flight. But managing a publicly listed company is quite different from running a start-up. Mr Haji-Ioannou today announced that he is to step down as chairman. The move follows tough criticism from one of easyJet's institutional shareholders, the Cooperative Insurance Society (CIS).

CIS last month took the unusual step of voting against easyJet's annual report and accounts at easyJet's annual meeting. CIS was unhappy at the way Mr Haji-Ioannou was appointed chairman, the lack of independence of non-executive directors, the share option scheme and the lack of an environmental impact policy despite concern over the environmental effects of airlines, especially in terms of carbon dioxide.

"The corporate governance failings are so severe," CIS said that it felt it had no option but to vote against the report and accounts.

In the post-Enron era, such a vote of no confidence cannot be taken lightly. In stepping down, Mr Haji-Ioannou has acknowledged the validity of those concerns. In welcoming Mr Haji-Ioannou's decision, CIS also acknowledged his entrepreneurial flair.

"It's the entrepreneurial drive of people like Stelios Haji-Ioannou that makes companies a success and it's good corporate governance that ensures companies continue to be a sustainable success in the long term," CIS said.

Even though Mr Haji-Ioannou is stepping down as easyJet chairman, the self-described "serial entrepreneur" will have plenty to do. His other projects range from easyRentacar and easyInternetCafe to plans to sell cheap cinema tickets called, yes you guessed it, easyCinema.

But easyJet will now be piloted by someone from a more traditional business background, Sir Colin Chandler, chairman of the Rolls-Royce subsidiary, Vickers Defence Systems and deputy chairman of engineering group Smiths. Having somebody with a Sir in his name running easyJet will take some getting used to, but it had to happen.


Source: luchtvaart.pagina.nl (http://luchtvaart.pagina.nl)

[Devils Advocate]

...... and so, acting as the voice piece for the Shareholders – institutional or otherwise - the new chairman’s vision for the future of easyJet is ?!

[no sig]

Devil
Watch that space... however, I have no doubt that Ray Webster and the rest of the easyJet board will guard jealously those values and culture that has taken EZY to where it is today.

[In the slot]

Are you sure "Sir Colin Chandler" hasnt changed his last name from marshall???
Could be a BA spy sent to throw a spanner in the works!