INSTITUTIONAL shareholders in Vodafone are to demand changes to the board of the mobile-phone group, including the removal of its deputy chairman.

Leading investors said the recent furore over Lord MacLaurin — the Vodafone chairman who has been at loggerheads with his chief executive Arun Sarin — is a “distraction” from the real problem: that some non-executive directors lack independence.

The heat is particularly on Paul Hazen, the company’s deputy chairman and senior independent director, who is supposed to be a sounding board for institutional disquiet. Hazen has worked closely with Sarin since 1987, including a long spell at Airtouch, the American mobile business that became part of Vodafone.

One top shareholder said: “Hazen is more like Sarin’s mentor than an independent. And this is the nub of the whole ‘camp’ situation on the board. It is unworkable. This idea of old guard and new guard does not stack up. Sarin himself is about as old guard as you get.”

The recent boardroom crisis has been presented as a dispute between an “old guard” loyal to MacLaurin and former chief executive Sir Chris Gent, and the new management team being assembled by Sarin.

One of Vodafone’s biggest shareholders said: “Vodafone has built its board through compromise and by mergers. If you look at the directors that joined with [the acquisitions of] Mannesmann and Airtouch, they joined not for what they could offer but as a sop to the business they came with.

“Because of Hazen, Sarin joined the board with the dice loaded in his favour. The board is being run as a Sarin fiefdom. He is just being propped up by his mentor.”

The shareholder continued: “Too much attention has been focused on the role and position of the chairman. The reality is the board is still stronger. Hazen is not independent by the standards of the combined code [on corporate governance]. ”

The boardroom tension comes while Vodafone is undertaking a far-reaching strategic review, contemplating a sale of its American arm and a move into fixed-line telecoms.

Hazen met a number of leading Vodafone shareholders last week. Other senior non-execs, including Penny Hughes, Lord Broers and John Buchanan, have also attended investor meetings in recent weeks.

Vodafone said it had already made three new appointments to its board since last September. The new directors are Tony Watson, former chief executive of Hermes Pension Management; Anne Lauvergeon, chairman of the executive board of Areva, a French energy company; and Philip Yea, chief executive of 3i Group.

In addition, Vodafone has announced the departure of two long-standing directors, Sir Julian Horn-Smith, deputy chief executive, and Peter Bamford, chief marketing officer.

Vodafone said: “There have been a number of appointments which should indicate that the shape of the board has changed.” It would be “inappropriate” to comment on the possibility of any future changes.

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