Standard Life is considering raising the hurdles members must clear to call a demutualisation vote, after a retired lecturer mustered nearly 1,500 signatures demanding the company convert.
The insurer changed its regulations last year so that the signatures of 1,000 members were required to call a special general meeting of the company. When Fred Woollard last challenged the company on its mutual status in 2000, he only needed 50 signatures. The company this week threw out the proposals put forward by David Stonebanks on the grounds that the resolutions proposed were 'not valid.' He had more than the 1,000 signatures supporting his call to vote on demutualisation that he needed, but Standard rejected the request on legal technicalities.
Standard may now consider raising the number of signatures needed to 5,000 and may also change the rules so that members must have been with the company for at least five years to be eligible for windfalls. A three-year rule was put in place in 2000 to stop carpetbaggers plundering the company. "A demutualisation bid is so disruptive to the company, in terms of the resources we have to set aside to deal with it," Marcia Campbell, company secretary said. "The board, along with most of our members, do not want to demutualise. It is not in the best interests of the company. We have 2.6 million members so the number required to call a meeting on such a huge issue for the company, as it stands today, is still very low in comparison to the whole membership."
Any changes the management did propose would have to be approved by members, who would be asked to vote.
Mr Stonebanks said getting 5,000 signatures would be "all but impossible". "This is democracy in action for you. You can organise something, they knock you back and then change the rules," he said. He has written to Standard since his request was dismissed to suggest that he come back with a revised resolution and the signatures he needs in February next year, which would allow Standard to combine the special meeting with its annual meeting in April and reduce its costs.
He has also called for a judicial review of their decision, but has yet to hear a reply.
Policyholders are bracing themselves for more bad news from the company today, when it announces new bonus levels. These have been cut once this year already and further reductions are likely.
The company shocked its staff earlier this week by telling them that up to 200 people would be made redundant and would only be redeployed if they moved to Edinburgh.