Tesco Director Lays Ground For Chairman Move

A director of Tesco (Xetra: 852647 - news) has begun drawing up a list of possible successors to the beleaguered chairman of the UK's biggest retailer as it battles to contain the fallout from a £250m accounting crisis.

Sky News has learnt that Patrick Cescau, who serves as Tesco's senior independent director, has told leading investors in the last week that the company is preparing for a range of scenarios, including the exit of Sir Richard Broadbent.

Mr Cescau, a former boss of Unilever (NYSE: UL - news) , has also made it clear that he does not want to be considered for the chairmanship himself, one institutional shareholder said.

A search for Sir Richard's successor has not yet reached a formal stage, and Tesco's board has not made a definitive decision that he will leave.

It remains unclear whether Mr Cescau has reached out to any of the potential candidates for the chairmanship.

Some shareholders have made it clear that they believe the imminent departure of Sir Richard would be counterproductive as Dave Lewis, Tesco's new chief executive, works on his plans to improve the company's fortunes.

"He [Mr Cescau] was transparent about the fact that this is happening but everybody understands that replacing the chairman now might further destabilise the company," a major Tesco investor said on Monday.

Sir Richard is supportive of the work being undertaken by Mr Cescau to begin examining a list of potential replacements, the investor added.

The Wall Street Journal reported last week that Sir Richard would consider stepping down once an investigation had concluded into the reasons for Tesco overstating half-year profits by approximately £250m.

The disclosure prompted a sharp fall in Tesco's already-depressed share price and the suspension of five senior executives.

Announcing the probe last month, the chairman said he wished to remain in his post but that shareholders would decide whether he "was part of the problem or part of the solution".

A number of investors have privately expressed support for John Gildersleeve, a former Tesco executive, to succeed Sir Richard, while Archie Norman, the former Asda boss who now chairs ITV (LSE: ITV.L - news) , is also regarded as a possible frontrunner.

Separately, insiders said that Mark Armour, a former finance director of Reed Elsevier (LSE: REL.L - news) , would replace Ken Hanna as chairman of Tesco's audit committee during the course of next year.

Tesco declined to comment.