Dolan led Y&R first to an IPO and then in May 2000 into its $4.7bn (拢2.9bn) merger with Sir Martin Sorrell's WPP Group where Y&R Advertising became the group's third advertising network.
His exit from WPP is being called a resignation and follows recent speculation that his relationship with Sir Martin had deteriorated. It has been reported that the two had clashed over the future direction of Y&R.
Fudge, 52, currently serves on the boards of several corporations including General Electric, Honeywell International and Marriott International. She departed Kraft in 2001, where she held responsibility for a range of high-profile brands including Maxwell House and Jell-O.
The appointment of Fudge has come as a complete surprise to the industry. She joins a growing list of senior clients who have recently taken positions on the advertising agency side. Others include David Hearn, who became the head of Cordiant, and last week, Interpublic Group appointed Christopher Coughlin from Pharmacia as its chief operating officer.
Fudge will oversee all of WPP's Y&R business, which, as well as the eponymous advertising agency, includes the public relations firm Burson-Marsteller and the brand design outfit Landor Associates.
Dolan leaves joined Young & Rubicam after seven years with the firm, having first joined in 1996 as vice-chairman and chief financial officer. He became chairman and CEO in 2001 following the merger with WPP.
In a statement, Dolan said: "Now that the merger with WPP has been firmly grounded, the time has come to step down and pursue other interests."
Y&R has recently enjoyed a number of high-profile wins including the Burger King account.
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