LSE moves quickly in search for new chief executive
Exchange has begun interviewing candidates even as TCI calls for chairman’s ouster
The London Stock Exchange Group has begun interviewing candidates for chief executive, a sign of the board’s growing confidence it will fend off an activist investor’s attempt next week to oust the chairman.
The exchange is looking for a chief executive who will refine rather than overhaul the strategy set by Xavier Rolet, who stepped down last month amid a governance crisis, according to two people aware of the board’s thinking.
David Warren, the group’s interim chief, does not want to pursue the top role, according to two people who have spoken to him.
The board is trying to return stability to the exchange ahead of an extraordinary shareholder meeting on December 19, where investors will vote on whether to remove Mr Brydon.
The meeting has been called by the Children’s Investment Fund, a 5 per cent shareholder, which is upset with Mr Brydon’s handling of the departure of Mr Rolet, who has overseen a revival of the exchange since 2009.
Last week two influential shareholder advisory groups, ISS and Glass Lewis, urged shareholders to back Mr Brydon, saying that TCI had failed to present a compelling case for his removal. The duo advise about two-thirds of the LSE’s share base.
The board, in order to maintain stability, is unlikely to review Mr Brydon’s position even if a sizeable minority of shareholders vote against him, according to one person involved in the board’s thinking.
“You can’t compare this to a normal AGM vote. We’re not in a normal situation,” the person said.
Senior executives are largely happy with the strategy laid down by Mr Rolet during his eight-and-a-half years in charge. His focus on licensing market data and clearing has helped underpin its £13bn market capitalisation.
The candidate has “got to have capital markets skills . . . but in a way the LSE is becoming a ‘platform’ company’”, said one person involved in the recruitment process.
The board also wants the new head to address technical integration across a number of the LSE’s assets as well as develop a strategy for the growing Chinese capital markets.
The LSE board is also looking at its response to new advancements such as cloud computing, machine intelligence and emerging blockchain technology, the person said.
The search is global and is being run by headhunters Egon Zehnder. The LSE started an initial scoping exercise for a new chief executive in August but only began a formal process in October when it was first announced Mr Rolet would leave.
Last week TCI laid out its case, saying that “shareholders have lost faith” in Mr Brydon, who had “run a poor process” of Mr Rolet.
Mr Rolet stepped down a year earlier than planned to head off further division at the top of the exchange. It came as the LSE sought to head off the publication of further revelations that would lay bare the tensions between Mr Rolet and the board over the company’s succession plans.