- REUTERS/Neil Hall
- The London Stock Exchange Group’s board is reportedly lining up its Chief Financial Officer as a temporary replacement for boss Xavier Rolet.
- Investor Sir Christopher Hohn has called a shareholder meeting to vote on removing the current chairman, and said regulators should intervene given the governance crisis.
- Rolet’s surprise resignation is due to take effect by the end of December 2018.
LONDON – The London Stock Exchange Group’s board is reportedly lining up its Chief Financial Officer as a temporary replacement for boss Xavier Rolet, in the wake of his surprise resignation.
According to people familiar with the plans, the group is considering appointing CFO David Warren as interim CEO when Rolet leaves by the end of December 2018, the Financial Times reported. Rolet has not given a reason for his departure, which was announced last month.
In response to the uncertainty, investor Sir Christopher Hohn has demanded the UK’s financial regulators intervene to appoint a new chairman. He has called an unusual shareholder meeting to vote on removing the current chairman Donald Brydon, and to extend Rolet’s contract until 2021.
In a letter to Brydon on Tuesday, the FT reported, Hohn said Rolet was “being improperly threatened by the board with severe reputational damage unless he immediately steps down as CEO… or publicly confirms that he does not want to remain.”
He said the situation “cannot wait for several weeks until the general meeting,” and that “the Bank of England and the FCA [Financial Conduct Authority] both need to immediately intervene to instruct the board to appoint a new chairman.”
Hohn is the founder of activist hedge fund The Children’s Investment Fund (TCI), which holds a 5% stake in the Exchange and has been critical of its governance since Rolet’s planned departure was announced. Given the nature of the work, the Exchange’s CEO must be regulator-approved.
The Exchange said in a statement: “In requisitioning the EGM, TCI triggered a process which we are now adhering to. As regards regulatory oversight, we have kept regulators abreast of developments throughout.”
Rolet has been CEO for eight years, during which time the Exchange’s share price has risen by around 500% to more than £38.
Large shareholders including BlackRock and the Qatar Investment Authority are likely to be involved in the discussions going forward. The date for the shareholder meeting is due to be published in the next two weeks.