Dobson fuels City’s spring of discontent
Appearances can be deceptive. At first glance, yesterday’s vote on Michael Dobson’s accession to the chairmanship of Schroders resembled a conventional boardroom coronation – but then it would, wouldn’t it?
Just 15 per cent of investors in the fund management group opposed his re-election to the board, but with 47 per cent of the company, the supportive Schroder family’s shareholding was always going to be decisive.
Dobson shouldn’t feel too smug – well over a quarter of “independent” investors, many of whom he will consider himself close to, cast a damning verdict on the board’s judgement that he is the right man for the job.
And his move to the chairman’s role does a disservice not only to Schroders’ own fund managers, but to the City as a whole. The rubric which recommends that chief executives should not move upstairs is there with good reason. Now that Dobson has ignored it, can he expect his governance team to be taken seriously in any other FTSE 100 boardroom?
There’s also the continued presence on the board of Bruno Schroder, the octogenarian who has been a director for 53 years. Ah, but Schroders retorts, it will appoint two independent directors later this year. One of them should certainly replace Lord Howard of Penrith, the senior independent director who has failed to earn his £137,000 fee.
The non-family investors who decided not to oppose Dobson because they belong to the same back-scratching City networks deserve equally trenchant criticism.
GET A GRIP, LSE
From one embarrassed City institution to another.
A fortnight ago, the London Stock Exchange Group denied to me that the Takeover Panel wanted it to clarify pejorative remarks made by chief executive Xavier Rolet about InterContinental Exchanges’ track record in European takeovers.
Lo and behold, on Monday, the LSE issued just such a statement, asserting that his criticisms were his “own views and assessment of ICE’s track record in Europe”.
That’s far from ideal when the LSE’s obligation to maximise shareholder value is under intense scrutiny. Still, there had been no equivocation on its part, the LSE insisted – the Panel’s request came after my enquiry to its public relations advisers.
That’s hard to believe, given that Rolet made his critical remarks nearly four weeks ago. The City’s wheels can sometimes turn slowly, but is the regulator of UK merger activity really that ponderous?
As if one mishap wasn’t enough, along came another one. On Wednesday, it was the turn of the LSE’s chief financial officer to mis-speak, this time about the potential for £7bn of regulatory capital relief from a merger with Deutsche Boerse.
Even its clarification was equivocal, since it failed to mention the relevant figure. Needless to say, these accidents are causing intense disquiet among LSE board directors and institutional shareholders.
If it really does want to deter ICE from making an offer, London’s bourse has got a funny way of showing it.
DUDLEY IN HOTSEAT
News of this month’s pay rebellion at BP clearly reached not only 11 Downing Street – cue George
Osborne’s response to Bob Dudley’s £13.8m pay deal – but his next-door neighbour, too.
I hear that the original seating plan for last week’s meeting of David Cameron’s business advisory group had Dudley sat alongside the PM. When attendees filed into the room, however, the BP chief found himself unceremoniously dumped at one end of the table.
A Downing Street spokesman laughed – nervously – when I asked him whether this was a consequence of the BP pay revolt, but what other reason could there have been?
I doubt Dudley – nearly £14m richer after a year in which the oil giant lost more than £3bn – cared very much.