Sir Martin Sorrell’s fate could be known as soon as next week as WPP moves swiftly to complete the investigation into allegations of personal misconduct against its chief executive.
Sorrell, who cut a rare holiday short to return to WPP’s headquarters in Mayfair’s Farm Street, central London, to deal with the allegations, said last week he expected the investigation to be “completed shortly”.
The outcome of the independent investigation being conducted by law firm WilmerHale could be completed as soon as next week, according to a source familiar with the process.
Sorrell, who has built WPP into the world’s biggest marketing and advertising group since starting the business in 1985, is carrying on as usual, preparing to engage with analysts and media for the company’s first quarter results which are set for 30 April.
Last week, WPP’s board revealed that it had appointed WilmerHale, which has headquarters in Boston and Washington as well as an office in London, as independent counsel to investigate an allegation of personal misconduct. Separately, WPP uses law firms Allen & Overy and Slaughter and May as advisers.
The inquiry is being led by WPP chairman Roberto Quarta and senior non-executive director Nicole Seligman, a former top executive at Sony and attorney who represented Oliver North in the Iran-Contra hearings and was later part of Bill Clinton’s team during the Monica Lewinsky scandal.
Late last week, Sorrell moved to beef up his legal representation appointing two partners from the London office of American law firm Quinn Emanuel Urquhart & Sullivan. Richard East and Sue Prevezer, QC, co-managing partners, have been instructed to work with Sorrell’s personal lawyer, Lewis Silkin partner Richard Miskella.
“I reject the allegation unreservedly but recognise that the company has to investigate it,” Sorrell said last week. “I understand that this process will be completed shortly. Obviously, I shall play no part in the management of the investigation under way.”
Quarta, a US businessman hired as WPP’s chairman two years ago, said at the company’s annual general meeting last year that succession planning to replace 73-year-old Sorrell has intensified, becoming “even more focused and detailed”.
He said there was an “exceptional team of potential candidates” from WPP’s top management to replace Sorrell, as well as a “constantly refined list of external candidates”.
The investigation has dramatically increased pressure on Sorrell, who is already feeling the strain as WPP’s share price has tumbled more than 30% in the past year, wiping £9bn off the value of the business.
Among internal WPP candidates the strongest is considered to be Mark Read, a former executive board member and head of WPP’s digital strategy, who is currently global chief executive of ad group Wunderman.
However, observers believe if the investigation goes against Sorrell the fallout for WPP, and the wider global advertising eco-system, will be rapid and catastrophic.
One quirk of Sorrell’s unique relationship with WPP is in his contract. Instead of the standard notice period of 12 months, it says he or the company can terminate his service “at will”.
“If Martin falls, WPP falls,” said one top advertising executive. “There will be chaos. The industry is not prepared, clients are not prepared. In the short term there will be chaos. The advertising industry is run like show business, its all about short-termism and that’s the problem.”
However, Sorrell has a received a boost from Harris Associates, the firm’s biggest shareholder. “‘Unless we hear Sir Martin has committed material offences, we believe he is the correct person to lead WPP,” said partner David Herro.