Vodafone Chief Exec throws in the towel

Nick Read (pictured), the Chief Executive of UK-based operator group Vodafone, is stepping down from his role at the end of this year, with no permanent replacement named.

No specific reasons have been offered, so this seems like a decision by the board that, having given Read more than four years to turn the ship around, the time has come for some new ideas at the top. While he’s formally stepping down at the end of this year, CFO Margherita Della Valle has been appointed interim Group Chief Exec straight away. Read will remain available as an adviser to the board for the first quarter of 2023.

“It has been a privilege to spend over 20 years of my career at Vodafone and I am proud of what we have delivered for customers and society across Europe and Africa,” said Read. “I agreed with the board that now is the right moment to hand over to a new leader who can build on Vodafone’s strengths and capture the significant opportunities ahead.”

“On behalf of the Board, I would like to thank Nick for his commitment and significant contribution to Vodafone as Group Chief Executive and throughout his career spanning more than two decades with the company,” said Jean-François van Boxmeer, Vodafone Chairman.

“During his four years as CEO, he led Vodafone through the pandemic, ensuring that our customers remained connected with their families and businesses. He has focused Vodafone in Europe and Africa as a converged connectivity provider and led the industry in Europe in unlocking value from tower infrastructure. Margherita has recently been taking a broader operational role within the Company and the Board fully supports her as interim Group Chief Executive.”

The straw that broke the camel’s back for the Voda board was probably the most recent quarterlies, in which Read announced a pessimistic outlook. The company’s shares fell on the news, are down 20% this year and by over 40% since Read took over. So Read can’t complain about the amount of time and opportunity he has been given. The share price has barely moved since this announcement, perhaps suggesting investor doubt about the move having any significant effect one way or the other.

Although only CEO for four years, Mr Read has been at Vodafone for over 20 years,” said Kester Mann of analyst firm CCS Insight. “It may have been that a fresh perspective on the embattled company was considered the best way forward. However, the new CEO will face the same tough inbox, with geopolitical uncertainty, rising costs, tough regulation, strong competition and questions over return on investment for the sector high on his or her agenda.”

Read was CFO before getting the top job so you have to figure Della Valle is in the running to replace him. But the feeling is that appointing another bean-counter will seem like a defensive move that is evolutionary rather than revolutionary. On the other hand, maybe operators like Vodafone just need to accept that they’re essentially utilities and stop wasting money on implausible diversification strategies. The choice of Read’s full time replacement may well indicate which of those strategic directions the Vodafone board prefers.

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