British American Tobacco has sparked controversy by appointing Richard Burrows as its new chairman less than two months after he resigned from a similar position at the Bank of Ireland following massive financial losses there.
BAT insisted last night that Burrows is an ideal person to lead the company given his earlier management experience at businesses such as drinks group, Pernod Ricard where he was a chief executive.
But shares in the world's second largest tobacco group fell 1.6% to 1870p and PIRC, the influential corporate governance consultancy, said investors needed more information before deciding whether to support such a nomination.
Earlier this year Burrows and his board came under ferocious attack from Bank of Ireland investors and was forced to issue a grovelling apology for a 95% fall in its share price and a government bail-out. "My colleagues and I deeply regret these losses that you have suffered and we apologise unreservedly to you," he said.
The non-smoker is to take on the chairmanship at the maker of Dunhill and Lucky Strike cigarettes on 1 November when Jan du Plessis to steps down to take on the same role at miner Rio Tinto.
Nick Scheele, BAT's senior independent director, said Burrows' career in the worldwide fast-moving consumer goods sector made him an "excellent choice", as did his "proven ability to work with a team from various cultures and countries".
"It would be quite wrong to suggest we had difficulty attracting the highest calibre to take over. We had an extensive short list and if you look at the board you will see it is made up of blue chip appointments," a BAT spokeswoman said.
Burrows comes in at a positive time for BAT, despite the recession. In July, the company, which sells its brands in more than 180 countries, beat forecasts with a 25% rise in first-half earnings.
Burrows' previous executive experience was in the drinks industry, as chief executive of Irish Distillers from 1978 to 2000 and co-chief executive of French spirits group Pernod Ricard from 2000 to 2005, based in Paris. He also sits on the boards of Danish brewer Carlsberg and pest control firm Rentokil Initial.
A PIRC spokesman said BAT would need to justify its decision to appoint Burrows directly to shareholders. "This [Burrows experience at Bank of Ireland] is certainly something we will take into account when it comes to deciding whether we can support the nomination at the next shareholder meeting." At an extraordinary general meeting in March, Burrows and his Bank of Ireland board was told by representative of billionaire businessman, Dermot Desmond who holds about 5% of the bank's shares, that the board should go so that the bank had "a full and clean break with the past".