Page 11 - Stakis A Case Study

Managerial Succession

Outside of the business, influenced by the age of Reo Stakis

and the dependence of the company on him, there was

speculation about who would succeed him. In August 1986,

it was announced that Professor Roland Smith would

become chairman of the Group in October of that year, with

Reo Stakis moving into semi-retirement in the new post of

president. Smith was regarded as a good acquisition for the
company, having gained considerable credit when, as

chairman of House of Fraser, he fought off the take-over
attempt of Tiny Rowland of Lonrho.

It was some surprise, therefore, when, in September, the

company announced that Reo Stakis, then 74, would

continue in the post of chairman in addition to the new

office of President and Professor Smith would act as a

consultant to the company. Initially, no explanation was

offered for this change in plan but it was thought that there

were differences of opinion on the board. Subsequently
Professor Smith became chairman of British Aerospace. It

was then rumoured that George Mathewson, the former

chief executive of the Scottish Development Agency was

approached but he instead chose the Royal Bank. During

this period both Reo Stakis and his son Andros were buying

shares in the Group: between September and December

Reo Stakis acquired 4 million shares at 130p per share to

take his holding up to 26.3 million. This, of course, had an