Activist fund ValueAct takes a seat on the top table at Rolls-Royce
ROLLS-ROYCE HAS given US activist shareholder ValueAct a seat on its board in a move that will give the investor influence over the engine maker as its seeks to turn around its fortunes.
Rolls said Bradley Singer – a partner and chief operating officer at San Francisco-based fund ValueAct – would become a member of the science and technology committee.
The decision to give an activist fund a seat on the board of a FTSE 100 firm is highly unusual, but comes after Rolls had lengthy talks with ValueAct, which is the group’s largest shareholder, holding 10.8 per cent stake.
Ian Davis, chairman of RollsRoyce, said: “Bradley Singer has an outstanding record as a business leader.
“He brings with him experience of public companies during periods of change, growth and significant financial outperformance, particularly in the US where Rolls-Royce has important business interests and a significant shareholder base.”
Rolls and ValueAct have also signed a so-called relationship agreement, covering share dealings and other corporate governance matters.
Rolls has been slashing costs and restructuring after a string of profit warnings.
The group last month revealed that annual profits tumbled by 12 per cent to £1.4bn in 2015, but this was less than expected as the firm’s cost-cutting has begun to take effect.
Rolls-Royce had warned over profits five times in two years, more recently hit by weak demand for corporate jet engines in emerging markets and tumbling crude oil prices impacting its marine operations.