Real estate giant Barratt launches search for next president | Economic news
City veteran John Allan is preparing to step down as chairman of Barratt Developments, Britain’s second-biggest homebuilder by market value.
Sky News has learned Barratt has asked headhunters at Russell Reynolds Associates to identify a successor to Mr Allan, who is also chairman of Tesco.
The process, which is not expected to be concluded until next year, comes at a sensitive time for Britain’s homebuilding industry, with many of its biggest companies criticizing a £3billion building safety levy. buildings imposed by ministers two months ago.
David Thomas, chief executive of Barratt, was particularly outspoken, telling Michael Gove, the housing secretary, that the additional tax burden was unfair and disproportionate.
‘It does not reflect well on the government’s regard for UK businesses, creates an uncertain tax environment which does not encourage businesses to establish themselves in the UK or list on the FTSE,’ Mr Thomas wrote the month last.
“It will hurt foreign business investment in the UK.”
Barratt has set aside hundreds of millions of pounds to pay his share of the new levy, which, together with other factors, has recently put downward pressure on the company’s shares.
In the past 12 months its stock has fallen by more than a third, although with a market capitalization of £5.1bn it remains larger than Taylor Wimpey, the third largest company by value in market.
Persimmon, which has seen a similar decline over the past year, is capitalized at nearly £7bn.
Mr Allan has been chairman of Barratt since November 2014, having joined its board three months earlier, meaning he still has more than a year to go before he is “expired” under the guidelines of corporate governance.
A source said the company’s annual meeting next year seemed like a logical time for Mr Allan to hand over the baton.
Mr Allan has held a series of senior positions in the business, including chairmanship of the CBI, the UK’s largest business lobbying group, and chairmanships at Dixons Retail and Worldpay.
He has also served on the boards of National Grid, Royal Mail and 3i Group.
Recently, he has become a notable advocate for the upper echelons of British business calling for a windfall tax on the profits of energy companies as ministers grapple with the cost of living crisis.
“There is an overwhelming case for a one-off tax on the profits of these energy producers, going back to those who need the most help with energy prices,” Mr Allan told the BBC ahead of the government’s announcement of a £5billion levy last month.
It was unclear over the weekend whether any of Barratt’s current board members were likely to be in the running to succeed Mr Allan.
Its non-executive directors include Dame Sharon White, chairman of the John Lewis Partnership, and Katie Bickerstaffe, the new co-chief executive of Marks & Spencer.
The search for Mr. Allan’s successor is led by Jock Lennox, Barratt’s senior independent director.
One of the most pressing tasks for Barratt’s new chairman is likely to be identifying a medium-term replacement for Mr. Thomas, who himself has held the position for nearly seven years.
Barratt declined to comment.