Tesco’s chair, John Allan, is to step down next month after eight years in the role, following allegations about his behaviour towards women that risked “becoming a distraction” to the UK’s largest supermarket chain.
Allan, also a former president of the CBI business lobby group, denies three separate allegations of inappropriate conduct. He has “unreservedly” apologised for a fourth allegation in which he admitted to telling a female CBI employee that her dress “suited her figure”.
His impending departure from Tesco comes as the future of the CBI remains in doubt. More than a dozen women have separately made complaints about a toxic culture at the lobbying group, as well as allegations of sexual harassment, bullying and other workplace misconduct.
The City veteran will step down on June 16 at Tesco’s annual meeting, the supermarket group said on Friday. Tesco was already looking for Allan’s successor as his tenure was set to end soon. It will conclude “in the near future”, it said. Byron Grote, the supermarket’s senior independent director, will become interim chair.
The three allegations denied by Allan include two separate alleged incidents of touching a woman’s bottom at a CBI dinner in May 2019 and then during Tesco’s annual shareholder meeting in June last year. Allan has also denied a claim that in 2021 he made comments about a woman’s bottom.
Tesco said on Friday it did not identify any evidence or complaints in relation to the AGM or Allan’s behaviour during his tenure after it launched “an extensive review of the allegation”, which was reported by The Guardian newspaper this month in the wake of the scandal that has engulfed the CBI.
The company, which sought external legal advice from law firm Freshfields, said it contacted meeting attendees, including former employees, to ask them to come forward if they had concerns.
Tesco was reeling from an accounting scandal when Allan joined in 2015, having overstated its profits by £263mn. The FTSE 100 company struck a £129mn prosecution agreement with the Serious Fraud Office over the affair. As chair, Allan presided over a revival of its fortunes under previous chief executive Dave Lewis, and hired Tesco’s now boss Ken Murphy.
Allan, who also chairs housebuilder Barratt Developments, said in a statement on Friday: “It is with regret that I am having to prematurely stand down from my position as chair of Tesco Plc following the anonymous and unsubstantiated allegations made against me, as reported by the Guardian. These allegations are utterly baseless, as the internal procedures undertaken by Tesco prove.”
He added: “Tesco undertook an ‘extensive internal review’ which included inviting Tesco employees and ex-employees to come forward on an anonymous basis if they had concerns about my conduct. Tesco also conducted outreach to those who attended the meeting where the incident allegedly happened, and video footage of the meeting has also been reviewed. There is no evidence of any wrongdoing at that time or at any stage of my chairmanship at Tesco and I remain determined to prove my innocence.”
Grote praised the 74-year-old for his “valuable contribution to Tesco” but said the allegations “risk becoming a distraction”. He added that the board’s search for a new chair was “well advanced”. According to previous reports, Allan was in line to step down early next year.
Barratt, where Allan is stepping down in September, declined to comment.
Dr Clive Black, a retail analyst at Shore Capital, said it was “unfortunate that something of this nature would be part of the grocer’s history”.
He added: “The board will be wanting someone who can demonstrate, principally to shareholders, and the wider stakeholder base, that it is a business that stands for what is right, and someone who can bring quiet stability.”