Anyone sceptical about the point of SIDs (senior independent directors) should take a look at Rentokil Initial. With both the chairman and chief executive badly tarnished by the company’s share price collapse and profit warnings, it was left to the SID, Peter Long, to steady the ship, reassure the despairing shareholders and bring in new blood.

He has done a great job, in the space of only three weeks hooking and landing one of the most respected teams in British business (with a bit of help from the headhunter John Viney). John McAdam, the new chairman, helped to make a sevenfold return for ICI shareholders. The 17 per cent leap in the Rentokil share price yesterday is testimony to his record there.

There is a price to pay. The new three-man team is being offered a shares-and-bonuses package worth more than £100 million if they lift Rentokil’s shares beyond 280p within five years.

Such a package will raise eyebrows. Sir Gerry Robinson, who offered to rescue Rentokil two years ago, wanted only £75 million in free shares and was sent packing with hoots of derision.

But Rentokil is now seen as a special case, the toughest of turnaround challenges requiring private equity-style rewards to attract the right management and provide them with sufficient carrots. Crucially, Dr McAdam has to perform. His team will hit the jackpot only if they create an additional £3 billion for shareholders. Sir Gerry, by contrast, wanted no performance hurdles at all.

SIDs may seem a tiresome extra distraction for boards when things are going well. But in pestilential times, they can be invaluable.

patrick.hosking@thetimes.co.uk

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