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LSE chair faces new call to quit as boardroom row refuses to fade LSE forced to explain reasons after chief executive Xavier Rolet leaves
(about 3 hours later)
An activist investor has refused to give up his campaign to oust the chair of the London Stock Exchange. The London Stock Exchange has been forced to set out the rationale for the departure of chief executive, Xavier Rolet, citing his “operating style” and questions from shareholders about how long he intended to stay.
In one of the highest-profile boardroom battles in recent years, Sir Chris Hohn’s TCI fund management group is insisting on requisitioning a shareholder meeting next month to force out Donald Brydon, the City veteran who has chaired the exchange since 2015. The exchange provided the explanation in a 20-page circular setting the date for the shareholders’ meeting demanded by an activist investor which wants to oust the company’s chairmanover his handling of Rolet’s departure.
This is despite the LSE’s plea to the fund management group – which owns a 5% stake – to withdraw its request for a shareholder meeting after it announced boardroom changes on Wednesday. In one of the highest-profile boardroom battles in recent years, Sir Chris Hohn’s TCI fund management group has demanded the shareholder vote – which will take place on 19 December – to remove Donald Brydon, the City veteran who has chaired the exchange since 2015.
The LSE said its chief executive, Xavier Rolet, would leave immediately – a year earlier than planned - and signalled a departure date for Brydon, saying he would not stand for re-election at the AGM in April 2019. TCI, the Children’s Investment Fund Management, had been fighting against Rolet’s departure but on Thursday dropped this following the LSE’s announcement that the chief executive would leave immediately – a year earlier than planned.
TCI, the Children’s Investment Fund Management, had been fighting against Rolet’s departure but on Thursday dropped efforts to reinstate him until 2021. The LSE circular urges shareholders to support Brydon andsays the non-executive directors unanimously agreed in October that an “amicable and smooth” succession plan for Rolet be put in place.
Hohn, though, in a letter to the LSE’s directors, said a shareholder meeting should still be called by 28 December to vote on Brydon’s position. “There is no change to our position on this,” said Hohn. It said shareholders had been asking how long Rolet intended to stay – he would been chief executive for 10 years by the end of 2018 – after he offered to step aside if the merger of the LSE with its German rival, Deutsche Börse, had taken place. That alliance was blocked by the European commission in March.
The row prompted the intervention of Bank of England governor, Mark Carney, whose remarks appear to have accelerated the departure of Rolet. The exchange added that “aspects of Xavier Rolet’s operating style were also important factors” considered by the board when putting in place a succession plan. It did not elaborate.
Carney had said on Tuesday that he was “mystified” by the continuing row over the chief executive’s position. The following day Rolet was gone. TCI had originally called for Rolet to stay until 2021 although the circular reveals that there was uncertainty about whether he was willing to, which had “negatively impacted” the relationship between him and the board.
“I can’t envisage a circumstance where a CEO stays beyond the agreed period. But it’s in the interest of all parties involved that clarity is provided as soon as possible,” Carney said. The LSE had been urging TCI to rethink its call for a shareholder meeting after bringing forward Rolet’s departure date and announcing that Brydon would not stand for re-election at the 2019 AGM.
Rolet had been chief executive of the LSE since May 2009 and had been planning to retire if a deal to merge the LSE with its German rival Deutsche Börse had been completed. The deal was blocked by the European commission in March, on the day the UK triggered article 50 and formally began its departure from the EU.
The row prompted the intervention of Bank of England governor, Mark Carney, whose remarks https://www.theguardian.com/business/2017/nov/28/mark-carney-london-stock-exchange-xavier-rolet appear to have accelerated Rolet’s departure. Rolet could not be reached for comment.