Dame Clara faces shareholder opposition to L&G chairmanship

Former LSE boss would 'clearly relish the challenge' of £325,000-a-year role at insurer

Leading shareholders in Legal & General are trying to derail the appointment of Dame Clara Furse, the former chief executive of the London Stock Exchange, as chairman of the insurer, a role for which she has been heavily touted.

A number of top investors in the FTSE 100 firm have privately declared their "strong misgivings" about the likely hiring of Dame Clara as chairman, following her appointment as a non-executive director at the group in May.

One leading institution said: "No, we don't think she is right for the post. She is hugely opinionated and dogmatic." Another shareholder said: "Her record is patchy. There are better candidates out there. Plus, imagine the fireworks if her and [chief executive Tim] Breedon had to work together."

Dame Clara stepped down as chief executive of the LSE in May after eight tumultuous years in the top job. During her time at the exchange, she locked horns with several suitors, including Deutsche Bourse and Nasdaq, both of whom made offers for the company. Nasdaq offered £12.43 a share, a figure that compares favourably with the LSE's current share price of £6.72p.

Sources close to Dame Clara say that she has yet to make up her mind about the L&G chairmanship but would "clearly relish the challenge" of the £325,000-a-year role.

Sir Rob Margetts, who has been chairman at the insurer since 1996, is currently leading the search for a replacement for Andrew Palmer, the firm's outgoing finance director.

Mr Palmer is stepping down amid considerable anger within the City over the way the firm slashed its dividend and its botched explanation of its capital position, a key measure of strength for insurers.

Many observers believe that Mr Palmer has been unfairly made a scapegoat. "Palmer is rightly furious at the way he has been hung out to dry," said one banker familiar with the situation.

The insurance sector has been hit by a wave of departures, including the exit of Nick Prettejohn, the head of Prudential's UK business who revealed plans to quit the group last week. Mr Prettejohn is leaving after failing to snag the chief executive's role left vacant by the surprise resignation of Mark Tucker earlier in the year.

Aviva's finance director, Philip Scott, recently said he was leaving the firm, while Standard Life's chief executive, Sir Sandy Crombie, said he was quitting the Edinburgh-based insurer. Sir Sandy is becoming senior independent director at Royal Bank of Scotland.

Speculation continues that Andy Haste, the chief executive of RSA, is set to leave the general insurer for a new post, possibly with the Zurich insurance group. Mr Haste is well regard by analysts and fund managers for turning the once ailing RSA around. One said: "He is the best chief executive in the sector. But he needs something bigger to get his teeth into."