Charles Johnston and finance director clash with board over plans to diversify consultancy

Charles Johnston, the managing director of troubled consultant MDA, has left the company after a dramatic boardroom split over its future direction.

Building has learned that Ian Storrier, the finance director of the company, is going to leave for the same reason.

Sources close to Johnston said he and Storrier “disagreed fundamentally” on strategy with the remaining five members of the holding board, led by Mike Jewel and Steve Jones. Following Johnston’s departure, Jewel has become chairman and Jones is group managing director.

The row centres on the fact that Johnston, who led a management buyout of the company in 2002, wanted to diversify the business beyond its traditional roots in quantity surveying. This was resisted by the board, making Johnston’s position untenable.

MDA employs some 135 staff and has a turnover of about £10m. At that size, Johnston believed that there were two options for the company: either to enlarge and diversify through acquisition – the option Johnston preferred – or do nothing and leave the company vulnerable to a takeover.

Problems remain for the company as Johnston is the biggest single shareholder, with a 16% stake. He is still in negotiation with the board over the terms of a sale of that stake. In total 43 members of staff took a stake in the business at the time of the buyout.

Johnston was unavailable for comment. Mike Jewel confirmed that Johnston had left the business and that Storrier was soon to follow.

An MDA spokesperson said: “Charles Johnston has now moved on to pursue commercial ventures of his own. Chairman Mike Jewel has been asked by directors and team leaders to run the company in a way that can be understood by all stakeholders.”

The spokesperson added that the firm had already received a commercial offer for Johnston’s stake in the company.

A history of MDA

This is the latest development in MDA’s turbulent story. In 2001 the consultant posted a £2.5m loss on a turnover of £16.3m and its chief executive Richard Houghton was voted out.

Stefan Allesch-Taylor, an entrepreneur with a 29% stake, wanted to merge it with a rival. But instead, a “branding expert” called Elaine Headlam took over, despite internal opposition among the firm’s 200 employees. Nine months later the company was in administration.

As managing director, Johnston, a former construction director at Sainsbury’s, increased turnover to £10.2m with a small profit.