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M&C Saatchi founders step down as company enters ‘next chapter’ after accounting woes

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By John Glenday, Reporter

November 19, 2020 | 4 min read

M&C Saatchi is installing a new leadership team as it seeks to move on from an accounting scandal which has dogged the company over the last year.

M&C Saatchi

M&C Saatchi founders step down as company enters ‘next chapter’ after accounting woes

The major shakeup of the agency group's board will see three of its co-founders – executive chairman Jeremy Sinclair; chief executive officer David Kershaw and executive director Bill Muirhead – leave the business.

In their place, Gareth Davis, currently non-executive deputy chairman, will become independent non-executive chairman and Moray McLennan, currently chief exec worldwide, will step up as chief executive and present a new growth strategy in January.

What has been going on at M&C Saatchi?

  • A break with the past sees M&C Saatchi announce a succession plan, with new leadership seeking to draw a line under an accounting scandal which drags on today in the form of delayed 2019 financial results.

  • The reset began in the first quarter with the appointment of four independent non-executive directors to the board.

  • M&C Saatchi has also appointed a new finance team, updated its accounting systems and compliance rules and simplified its group structure to prevent a repeat of the fiasco.

  • Despite its well-publicised reporting problems and broader economic uncertainty, M&C Saatchi reported a profit in 2020.

Who is in and who is out?

  • Now executive chairman, Jeremy Sinclair; chief executive officer David Kershaw and executive director Bill Muirhead have all given notice of their pending departure to make way for new leadership.

  • In a joint statement, the trio said: "We have spent this last year replacing ourselves, re-examining the strategy and importantly re-building the board. That having been done, it is time for us to make a graceful exit, although we plan to remain shareholders."

  • Following the publication of the delayed 2019 audited results, Sinclair will pass on the baton to non-executive deputy chairman Gareth Davis who will step up as independent non-executive chairman.

  • He will be joined by Moray MacLennan, current chief exec worldwide, who will succeed Kershaw as executive director by the end of the year.

  • Last to go will be Muirhead, with an expected departure from the board set for March 2021.

  • Davis and McLennan will sit alongside Mickey Kalifa, chief financial officer; Lisa Gordon, senior independent director and independent non-executive directors Louise Jackson and Colin Jones.

What progress has been made toward publishing 2019's financial results?

  • On 1 October trading in M&C Saatchi shares was suspended following delays to the publication of audited results for the 2019 financial year.

  • The company now states that the delayed report will be available 'imminently', enabling trading to resume.

  • In a statement, Davis said: "We have navigated our way through our recent problems and the enduring strength of the business, founded and developed by Jeremy, David and Bill, will serve us well in the future."

  • MacLennan added: "Much has been learnt over the past 12 months and I believe M&C Saatchi is stronger and wiser coming out of 2020.

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