Legendary ad man Maurice Saatchi, co-founder of M&C Saatchi, abruptly resigned as executive director Tuesday along with three independent board members — Lorna Tilbian, Michael Peat and Michael Dobbs.
Saatchi founded the London-based agency with his brother Charles in 1995 shortly after the pair exited Saatchi & Saatchi, their first agency that grew to fame in the 1970s and 80s. (Saatchi & Saatchi was later acquired by Publicis Groupe).
Yesterday’s departure of Saatchi and the three directors comes amid a growing financial scandal at the agency, which began earlier this year when it disclosed accounting irregularities including an overstating of profits.
A forensic accounting team from PwC has been conducting a probe, and last week the agency disclosed that the problems were more extensive than initially thought and reduced the firm’s profit forecast for the year.
Multiple reports (including this take from Bloomberg) have cited unnamed sources as saying the departures were the result of a board room dispute on weather current M&C Saatchi CEO David Kershaw should be removed from the post.
For now, Kershaw is staying put.
Board chairman Jeremy Sinclair issued a statement: "We have accepted the decision of these Directors to resign. We are determined to restore the operational performance and profitability of the business and are already implementing all of the recommendations set out in the PwC report we announced last week. We had started a process to reconstruct our Board with new Independent Directors. This new Board will have a mandate to conduct a full review of all aspects of our governance."
Company shares were down 6% in today's trading on the London Stock Exchange.