Standard reinforces defences against converters

Standard Life, Europe's largest mutual life assurer, yesterday unveiled plans for changes to its rules designed to thwart all but the most determined carpetbaggers.

The firm has decided to strengthen its defences despite not coming under attack from would-be demutualisers since the Australian fund manager Fred Woollard in 2000.

It denied that it felt under imminent threat from carpetbaggers. A spokesman said: "We have had no further challenges since July 2000. We feel these changes are entirely fair – we have to strike a balance between the stability of the company and people being able to take an active role."

Its proposals, which members must vote on, include boosting the number of people needed to call a special general meeting from 50 to 1000. These meetings are necessary if members want to fundamentally alter the nature of the company, for example by converting it to a listed company.

Standard Life is also pressing for the number of nominations necessary to put forward a candidate for the board to be increased from two to 250. This will make it harder for members to challenge candidates endorsed by the board. But at the same time the society is pressing for the election of directors to be made fairer so that it does not favour its own candidates.

As well as raising the hurdle for calling a special meeting, Standard Life wants the right to dismiss a large number of reasons for a meeting. It wants to be able to say no to a meeting if it would be used for "frivolous or vexatious purposes".

These include requests dealing with subjects which have already come up in the past three years and applies mainly to demutualisation attempts.

The change would bring Standard Life into line with building societies such as Nationwide which have come under fire from carpetbaggers and now have a rule that if they have defeated a demutualisation challenge they will not have to have another vote for three years.

Standard Life is writing to members over the next two weeks and wants them to vote on the changes by its annual general meeting on 30 April. It needs 75 per cent of those voting to back them.

Standard Life was widely criticised by members for being far too out-of-touch during the struggle with Mr Woollard. It has since consulted members about changes to the society and has made its rules much clearer to understand. Its new chief executive, Iain Lumsden, is expected to shake up Stnadard Life still further.

The new policy on demutualisation will please many policyholders who do not want to see the society forced to defend itself against another demutualisation attempt. The last one cost Standard Life £11m.