WPP chairman Roberto Quarta should follow Sir Martin Sorrell out the door

Business

WPP and Sir Martin Sorrell are learning just how true the old cliche about nature abhorring vacuums is. 

The man who dominated the group he founded for 33 years (to an unhealthy degree as has become increasingly clear) departed under a cloud in April before the completion of a probe into the alleged misuse of company funds. 

It ultimately found no evidence of that, but the findings have remained under wraps, and calls from the likes of Liberal Democrat leader Sir Vince Cable for them to be published have been ignored. 

As usual in these situations, both sides signed off on a statement and then agreed to keep quiet in the hope that the fuss would eventually die down.

That hasn’t happened. 

With an AGM looming, The Wall Street Journal on Saturday reported that the investigation looked at whether WPP funds had been used to pay for a sex worker.

There followed a lengthy account of his departure in the Financial Times, which suggested that the lines between the personal and business expenses of a man who was never really able to take himself off the clock had become blurred.

There were also claims that he bullied junior employees and had been spotting entering an address in a London red light zone. 

Sir Martin has denied any misuse of company funds or that company funds were paid to a sex worker and has made it clear he will not be commenting further. 

I imagine the WPP board will do the same at tomorrow’s AGM in response to any questions from the floor relating to him. It won’t stop the questions coming. 

Meanwhile, the rumours will continue to percolate around the City. 

One of the things chairman Roberto Quarta has been deservedly criticised for is the absence of a non-compete clause in the departure agreement, allowing Sir Martin to press ahead with founding a new ad business. 

Those rumours may do the job of one. Potential clients will wonder whether it’s worth the risk of associating with Sir Martin and his new venture given the cloud he currently finds himself under.  

Some may also be asking those questions about WPP. 

Early indications are that the company will face a heavy vote against its remuneration report, which is nothing new for a business that was at one point paying Sir Martin £70m, and really represents shutting the door after the horse has bolted. 

There are also signs that Mr Quarta, who was supposed to exercise oversight over the CEO, may endure a significant vote against his re-election. 

So he should. 

The ongoing scandal couldn’t have come at a worse time for WPP, which has been struggling in the face of digital disruption and intense competition. 

The company, which has interests ranging across market research, media buying and PR, as well as advertising, needs to clean house and create space to address its issues. 

Both would be served by Mr Quarta’s departure, if it isn’t forced upon him.

But it may not be enough.

Leave a Reply