Standard Life, the Scottish life insurance group, yesterday gave in to demands from Fred Woollard, the rebel policyholder, for a full vote on whether to ditch 175 years of mutuality and convert to a quoted company.
At Standard Life's annual meeting in Edinburgh, John Trott, the chairman, said the group would write to its 2.3 million policyholders in the next few weeks to convene a special meeting to debate and vote on demutualisation. The move was in response to a formal demand to requisition such a meeting from Mr Woollard, who heads the Standard Life Members Action Group (SLMAG).
Mr Trott said that ahead of the meeting, which will take place within two months, the board would set out a vigorous defence of the case for remaining mutual.
Mr Trott said the board had reviewed the company's structure as recently as September, when it agreed unanimously that "the interests of the company are best served by retaining our mutual status". SLMAG claims that demutualisation would trigger windfalls to each policyholder of £5,000 to £6,000.
Mr Trott said: "The company has benefited greatly from its mutual status, and not being required to pay dividends to shareholders, has been able to provide the best possible returns to its members." He added: "Mutuality works for this organisation and we believe strongly that it can go on doing so for further generations."
Mr Woollard welcomed the decision, and said he was confident of gaining the 75 per cent majority required to force the board to consider demutualisation. An earlier requisition tabled by Mr Woollard in February was thrown out on a technicality.
Outside the Edinburgh conference venue, those attending were treated to a SLMAG billboard giving the results of a poll showing 80 per cent of members favoured demutualisation. Mr Woollard conceded that his poll showed only 58 per cent in favour, but he had assumed that the 27 per cent of undecided voters would split proportionately to those who had already expressed an opinion when it came to the vote.
Mr Trott said Standard Life's own poll in February showed that 25.5 per cent were in favour of demutualisation and 23.3 per cent against, with 49.6 per cent "don't knows". Scott Bell, managing director, said he was confident of seeing off the rebels' challenge.
Mr Woollard claimed that the meeting had been stage-managed to exaggerate the scale of support for the board. His initiative received a boost earlier this week when it emerged that Barclays Global Investors, a major holder of second-hand endowment policies, was funding his campaign.Reuse content