Standard Life beefs up board to defend mutual status

Standard Life has appointed two new non-executive directors with corporate finance backgrounds as it prepares to face a demutualisation campaign.

Norman Blackwell, a special adviser to KPMG's corporate finance division, and Gerry Grimstone, formerly head of investment banking at Schroders, will become non-executives at the company. Standard Life also said that Giles Henderson, one of its current non-executive, was stepping down to devote more time to Pembroke College, Oxford, where he is master.

Standard is also soon to lose John Trott, its chairman, who has been on the board for nearly 30 years. Sir Brian Stewart, the chairman of the brewer Scottish & Newcastle, will take over.

"We need to find replacements for Mr Trott and Mr Henderson and we believe we have found ones with the skills we wanted," Standard Life said. "The directors believe that it is in the best interest of policyholders to remain mutual, and we are just as committed to staying mutual after these board changes. The new non-executives are pro-mutuality."

David Stonebanks, the retired lecturer that is leading the campaign to convert the mutual to a Plc, yesterday said he had 1,300 signed forms from members requesting an extraordinary general meeting to vote on its mutual status. He said he was receiving 200 forms every week.

Mr Stonebanks said: "It is the duty of the board to respond to what the owners of the business - the policyholders - want. If a substantial number [of policyholders] vote for demutualisation, it won't matter who is on the board. But it is interesting that they are taking on people with Plc experience."

Standard has come under fire for failing to have sufficient independent non-executives on its board.

Ronnie Sloan, a semi-retired actuary that stood for the Standard Life board last year, said: "This seems like more of the same to me. The biggest problem is that they do not have an independent actuary on the board. They already have plenty of directors with corporate finance experience, but there is no-one to keep a check on the board's actuarial decisions. Defending mutuality should not be a criteria for joining the board. It is not what board members are supposed to do."

As the demutualisation campaign gathers pace, Standard is also understood to have been sizing up investment banks for help with its defence. Schroders advised the company when it last defended its mutuality in 2000.