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LSE directors 'did not act improperly' during boardroom crisis – but report kept under wraps

A report into the LSE's handling of a major investor bust-up last year found that the board needs to engage more with investors, and not just through its chief executive  - Jason Alden/Bloomberg
A report into the LSE's handling of a major investor bust-up last year found that the board needs to engage more with investors, and not just through its chief executive - Jason Alden/Bloomberg

Board members at the London Stock Exchange (LSE) say they have been cleared over their handling of a bitter boardroom crisis with a major investor last year – but the final report is being kept under wraps. 

The LSE hired Simon Collins, former UK chairman of KPMG, to probe a huge row with one of its top investors The Children's Investment Fund (TCI) over the exit of the exchange's former boss Xavier Rolet.

Chairman Donald Brydon told investors at the firm's annual general meeting that the investigation found that "even with hindsight the board did not act improperly and alternative approaches to Mr Rolet's succession would still have caused disruption". 

However shareholders were not shown the report, with Mr Brydon saying it is "inappropriate to go into the detail of all that happened" with the dispute and the exchange is now "focused on the future". 

Instead he pointed to a raft of suggestions Mr Collins made following the probe, including a recommendation that the whole board should engage more with investors rather than relying solely on the chief executive.

The board should also clearly set out its behavioural expectations in company policies, the report concluded, while LSE directors should be prepared to tackle any "behavioural or performance issues" at the top.  

TCI VS LSE
TCI VS LSE

Mr Brydon did not explain why Mr Collins' reached these conclusions or if there were areas the board could have handled the situation better. The LSE was criticised last year for not being clear over the circumstances surrounding Mr Rolet's resignation, for example. 

The popular chief executive resigned in October but had been due to remain in his job until December this year. However TCI's campaign to keep him in the job and force Mr Brydon out escalated to such an extent that he then had to leave a year early.

The spat gripped the City, with Mr Rolet generally receiving plaudits for boosting the LSE's value many times over during his eight-year tenure. 

TCI was notably missing from the firm's annual general meeting on Tuesday morning. 

Mr Brydon, who is stepping down from his role next year, said that the report's recommendations did not alter "the highly unusual and fundamental difficulties" presented by last year's battle. 

The company named Goldman Sachs' banker David Schwimmer as its new chief executive earlier this month. One source said TCI supports the appointment.