Rolls-Royce Plc (RYCEY) has appointed a partner from its largest shareholder ValueAct Capital to its board after the activist investor built up a stake in the British engineer as it issued a string of profit warnings last year.
Rolls-Royce Chairman Ian Davis said the appointment of Bradley Singer to the board would not change the group’s strategy but would rather bring experience from an executive who has worked with public companies going through periods of change.
Rolls-Royce’s profits are set to halve this year after dropping 16 percent in 2015 on tough trading in its civil aerospace unit and as its marine engine business suffered from declining demand from oil and gas customers. However, its shares have recovered in recent weeks after a string of cost cuts and management appointments allowed it to end a depressing streak of downgrades to its profit forecasts.
Warren East, who became CEO of Rolls in July last year in a bid to steady the group, has previously told Reuters that ValueAct backed his plan to turn around the company.
“I have been deeply impressed with the senior leadership team and Directors of Rolls-Royce and their commitment to improving their operations to match the company’s world-class product portfolio and engineering capabilities,” Singer said in a statement.
The company said Singer would join the board with immediate effect and become a member of its Science and Technology Committee. Singer is a partner and chief operating officer of ValueAct Capital which owns 10.8 percent of Rolls.