Diageo begins search for new chairman

Diageo has started the search for a new chairman to take over from Javier Ferran, who is due to retire when his term of office expires next year, according to reports.

Sky News said the world’s leading premium drinks group has appointed the head-hunters Russell Reynolds Associates to identify a replacement.

Ferran, who has been chairman of Diageo since 2017, is one of the most experienced executives in British business and finding a successor to one of the most prestigious jobs in UK boardrooms will be a painstaking process.

Spanish-born Ferran, 67, is also chairman of the parent company of British Airways, International Consolidated Airlines. He has served as an operating partner with BlackRock’s private equity fund and was a partner of private equity firm Lion Capital from 2005 to 2019. He is also a director of Associated British Foods.

He also brought a wealth of drinks experience to Diageo when he succeeded former chairman Franz Humer, who retired in 2017.

He joined Martini & Rossi in 1988 and later became managing director. In 1992, he joined Bacardi and served as regional president for Europe, Middle East and Africa from 1994. He was president and CEO from March 2003 to November 2004.

Rapid change

Ferran, who has a personal stake of more than 300,000 shares in Diageo (worth more than £9m despite the price sliding more than 20% in the past year) has also been a director of Coca-Cola European Partners and SABMiller.

When his successor is appointed, it will mark a period of comparatively rapid change at the top of Diageo.

Chief executive Debra Crew stepped into the top executive role last spring following the sudden death of Sir Ivan Menezes. She had already been nominated to take over on his planned retirement at the end of June.

Finance director Lavanya Chandrashekar has been in post since summer 2021 following her predecessor Kathryn Mikells moving to become the finance head of ExxonMobil, America’s largest publicly traded oil and gas group.

Shares

Diageo’s shares moved up on the news of the search for a new chairman following months on the slide.

With a market capitalisation of £65bn, it is going through a torrid time in the wake of a profits warning in November following the emergence of extensive overstocking in Latin
America, especially of scotch whisky in Mexico and Brazil.

Last week Crew sought to quell investor anxieties by saying that Diageo was taking rapid action to rectify the problem.

Although profits in this financial year will be muted because of the Latin American debacle, she maintained the group’s long-tern guidance and predicted that it would soon be back on a growth track.

Diageo was approached for a comment on the news by the drinks business.