British American Tobacco (LON:BATS) is under pressure to replace its long-serving chairman to comply with new corporate governance rules, The Times has reported. The news comes after it emerged earlier this year that blue-chip peer Imperial Brands (LON:IMB) was engaged in succession planning over its chairman, whose tenure exceeds new guidance of nine years.
BAT’s share price has climbed higher in London in today’s session, having gained 1.12 percent to 3,123.50p as of 09:52 BST. The stock is outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.08 percent higher at 7,431.42 points. The group’s shares have given up just under a quarter of their value over the past year, as compared with about a 2.3-percent gain in the Footsie.
BAT under pressure to replace chairman
The Times reported this morning that BAT was under pressure to replace Richard Burrows, 73, who has been the group’s chairman since November 2009. The newspaper explained that the corporate governance code, published in July last year and applying to accounting periods from January, stated that “the chair should not remain in post beyond nine years from the date of their first appointment to the board”.
It, however, also states that to “facilitate effective succession planning,” the period could be extended for a “limited time, particularly in those cases where the chair was an existing non-executive director on appointment.
The news comes as BAT prepares to hold its annual general meeting on April 25, having posted its full-year results at the end of February.
Analysts weigh in on FTSE 100 tobacco group
Analysts at Jefferies reaffirmed the tobacco maker as a ‘buy’ last week, without specifying a valuation on the stock. According to MarketBeat, the FTSE 100 group currently has a consensus ‘buy’ rating, while the consensus BAT share price target stands at 3,851.88p.