Five possible reasons for Rolls-Royce chief executive's departure

Here are five potential explanations for Rolls-Royce chief executive John Rishton's surprise departure:

1. Look at the shares. When the departure of a chief executive is greeted by a sharp jump in the share price, you know that all was not well as far as investors were concerned. The shares were up 3 per cent on Wednesday morning. Mr Rishton came under pressure last year after four profit warnings in quick succession and, though his finance director Mark Morris stepped down in the autumn, there were still those who felt the top Rolls-Royce manager should have paid the price as well. Yet that pressure appeared to have dissipated in recent months, with investors giving him the benefit of the doubt while he sought to cut costs and restructure the business.

2. Activists. Rolls-Royce has been the target of a new more active shareholder base. This year the Sequoia Fund, a US investor, attacked the group's twin pillar strategy of expansion in marine propulsion while facing significant investment and production challenges in aerospace engines. Some core shareholders have also called for a review of the marine business, which has been underperforming in recent months. Yet Mr Rishton, along with the chairman Ian Davis, has been a staunch defender of the strategy.

3. Communication. Remarkably, Mr Rishton was praised by the company's trade unions even as he pushed through a radical cost-cutting programme which will see the departure of thousands of engineers and other staff. But he was less adept in getting his message across to the financial community - for whom, those close to him say, he has a robust disdain. So there was only a wavering faith that his programme would deliver quickly enough to satisfy investors and analysts.

4. Which brings us to medium-term guidance. Rolls-Royce is still sticking to its pledge to take civil aerospace operating margins from 12 per cent this year to 15 per cent at some unidentified date. The market is becoming increasingly suspicious that this target may have to be abandoned later this year. The group is selling more engines for passenger jets than ever before but given that these are sold at a loss and money is made on the lifetime service and maintenance contracts, margins are more likely to tread water than be boosted, according to many analysts. Another broken promise might have been one too many.

5. Maybe he simply had enough. Mr Rishton has had some tough jobs - first in helping to restructure British Airways as finance director and then in cleaning up an accounting debacle at Dutch retailer Ahold as chief executive. But Rolls-Royce, an icon of UK engineering, is in another category entirely. This is not a business which is on the brink of collapse, it is winning record orders and its technological excellence is not in question. It takes time to change a culture as deeply embedded as that which permeates Rolls-Royce and Mr Rishton was beginning to score some real successes. Just look at the $9bn order last week from Emirates Airline for engines to power 50 A380 superjumbos - the largest in the UK group's history. But after the gaffes of last year Mr Rishton was not going to win praise so easily. It also takes time to restore investor confidence. Perhaps Mr Rishton decided that it was time he preferred to spend with his family.

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