Standard Life targets carpetbaggers

FINANCIAL services giant Standard Life is seeking approval for a package of measures that will make it much harder for 'frivolous' carpetbaggers to unseat the board or force a vote on demutualisation.

Europe's largest mutual is mailing voting packs to all 2.4m of its members, asking them to approve rule changes at the annual meeting on 30 April. Standard Life directors want a 20-fold increase from 50 to 1,000 in the number of members required to call a special general meeting, while the number of members required to nominate a director will rise 125 times over from two to 250.

The directors would also have the right to turn down requests for a special general meeting, or even for business to be dealt with at an SGM if the business is 'substantially the same' as discussed or decided in the previous three years.

Meetings for the purpose of 'seeking publicity for defamatory matter or for frivolous or vexatious purposes' can also be refused. Taken together, these are further obstacles to demutualisation, a call for which by Australian fund manager Fred Woollard was narrowly lost two years ago.

Directors also want a one-member-one-vote system, removing the right to more than one vote held by the 62,000 members who have joint holdings. John Trott, Standard Life's chairman, said: 'We believe the proposals will help the company run more smoothly - ultimately to benefit our members. We hope they will support the changes.'

To get their way, the mutual's directors will not need the approval of a majority of the members, but of three-quarters of those voting. The rule changes coincide with the arrival of a new chief executive, Iain Lumsden, on the retirement of Scott Bell last month. Bell went after 14 years, his final year's pay having risen £102,000 to £791,000, net of £372,000 in bonus and a pension of about £373,000 a year.

The mutual's excess capital, designed to cushion policyholders from stock market ups and downs, fell by £5bn to £8bn between November 2000 and November 2001. Standard Life's assets under management exceed the combined stock market value of BA, Boots, Cadbury-Schweppes, Sainsbury's and Tesco.

Standard Life directors are promoting the rule changes as an economy measure and as the first overhaul the company has had in eight years. The mutual, 177 years old this year, is governed by its own Act of Parliament, but has the power to update the Act's regulations from time to time.