Moray MacLennan: 'We will emerge stronger' after M&C Saatchi accounting woes

MacLennan: 'variety and quality of the product is stronger than it ever has been'
MacLennan: 'variety and quality of the product is stronger than it ever has been'

Share price fell 5.8% after four directors quit board.

Moray MacLennan, worldwide chief executive of M&C Saatchi, has reassured staff and clients that the underlying business is "sound" and that the agency will "emerge stronger".

It follows the shock resignation of Maurice Saatchi, one of the shop’s founders, along with non-executive directors Sir Michael Peat, Prince Charles' former private secretary and a former KPMG accountant; Michael Dobbs, a Conservative peer and author of House of Cards; and Lorna Tilbian, a media banker.

In an internal memo to staff, MacLennan explained that this "will not effect [sic] what you and your people do everyday".

He added: "The variety and quality of the product is stronger than it ever has been and we will emerge stronger, with higher standards of governance."

M&C Saatchi’s share price fell 5.8% to 97p after half the board quit over an accounting scandal. The stock has fallen from almost £4 earlier this year.

Campaign understands that the company is already looking to recruit new non-executive directors and one of the first interviews has already taken place.

A source close to M&C Saatchi said that Lord Saatchi disagreed with the other founders (David Kershaw, Jeremy Sinclair and Bill Muirhead) over how the company has responded to the sequence of events around the accounting scandal and the future composition of the board.

As a result, the non-executive directors, along with Saatchi, handed in their resignations on Tuesday evening.

Numis Securities, a City advisor to M&C Saatchi, strongly advised that Kershaw should not step down at this time.

One of the first things that the new board members will be required to do is to conduct a governance review of the business, once they have received a final report from PwC relating to the accounting problems. 


The full memo

This will not of course effect what you and your people do everyday to deliver for your clients, in any way.

But it will inevitably give journalists headlines and room to speculate.

The re-assurance to our people and to clients is the same as before – the underlying business is sound, the variety and quality of the product is stronger than it ever has been, and we will emerge stronger, with higher standards of governance.

Specifically on the board make up – we will re-fresh the board non-execs. We will give them a full and free remit to review governance.

You should tell/communicate with all your people as you think appropriate obviously.

I am as ever around for a call and or email.

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