The independent action group for current and ex Equitable Life policyholders, funded by contributions.

Equitable Members Action Group

Equitable Members Action Group Limited, a company limited by guarantee, number 5471535 registered in the UK

Documents: 20/12/2000 - Edited report of EMAG meetings with non-exec directors of ELAS on Dec 13th and Dec 20th 2000

Edited report of EMAG meetings with non-exec directors of ELAS on Dec 13th and Dec 20th 2000

EMAG requested an informal meeting with non-executives of ELAS. It is EMAG's view that the non-execs have a special responsibility to the members.

On Dec 13th Jennie Page, Jonathan Dawson and Peter Davis, as individuals, not representing the ELAS board, met with EMAG committee members Paul Braithwaite, David Browning, Vincent Nolan and member Alex Henney.

EMAG would like to compliment the individual non-execs for their attendance and participation. EMAG received a constructive hearing. The non-execs promised to report back after the ELAS board meeting on Dec 20th. The same teams re-convened on the afternoon of Dec 20th, with the exception of Peter Davis who was on holiday.

Both sides expressed the view that a bridge had been opened that could, given the goodwill of the respective organisations, be built upon.

Board composition:

On Dec 13th a number of recommendations were made to the ELAS board, including the view that the current board should resign. The Dec 20th meeting commenced with the announcement that the President and the non-executive board had announced their intention to resign, once replacements have been appointed. This news was welcomed by the EMAG delegation.

A new committee for appointing a President and selecting the new non-executives will be chaired by Jonathan Dawson and will comprise Chris Headdon, plus Peter Martin (Vice President) and Jonathan Taylor - with advice from headhunters, to be appointed.

The Jeremy Lever non GAR Legal Avenue:

EMAG still hopes to persuade the Society that an independent counsel's opinion is a worthwhile application of member funds.

ELAS would prefer to avoid further litigation of any kind, but the ELAS board remains open to persuasion following receipt of further representations.

Requests for information/initiatives:

On Dec 13th the EMAG delegation asked for:
  • The full list of 450,000 members to be provided in electronic form.
  • A copy of the sales prospectus.
  • Details of expenditure on legal fees and banking advice to 8th December.
  • A digest of ELAS board minutes to be posted on website.
  • Independent and objective reporting on ELAS investment performance.
On 20th December further questions were added, including:
  • Whether it would be possible to negotiate with the FSA to allow an extended time to reverse the 60/40 ratio equity/gilts and bonds. This because of the new "closed fund" status and the facts that GARs were least likely to crystallize, plus evidence thus far of 35% take-up rather than the assumption of 80%.
  • EMAG recommends that ELAS immediately put rebuttals of what are perceived as misleading press articles out as releases and on the website.
  • There is an urgent need to communicate to policyholders whether there will be a bonus for the second half of year 2000 and, if so, that it will be announced as usual in February.

Other matters:

The relationship with the FSA was discussed: Press comments such as "The FSA is working hand in glove with ELAS?. The FSA is pressuring ELAS to lower the 10% penalty?. The FSA is urging ELAS to appoint member directors etc" were denied. Chris Headdon has day to day dealings with the FSA but, EMAG was assured, no pressure is being applied. The FSA does not wish to act as a director or shadow director.

EMAG recommended that there should be both the co-option onto the board of three representatives from action groups and the creation of a members panel drawn from various action groups to act as a focus for communications and exchange of views. ELAS will consider further, in the light of the announced board changes.

ELAS has an open mind about commissioning a comprehensive member survey as proposed by EMAG. Timing, objectives and scope need further study.

EMAG asked that ELAS treat its members as professional to professional and be willing to share more information.

EMAG emphasized its fraternal relationship with ELPHAG and an intention to reciprocate the invitation for one of their committee members to attend any next meeting.

The non-execs suggested that EMAG prepare a dossier for the ELAS board on its membership/committee/objectives. ELAS board members have expressed reasonable concerns about the validity and composition of the various member action groups - of which there are now several.

EMAG stated that it believes itself to be the ONLY action group that seeks to represent the interest of ALL member/policyholder classes. EMAG is a subscription based organization with a constitution and it is the only independent action group, without affiliation to any financial enterprise. It is entirely self-funding.

ELAS recognizes the need for greater communication with policyholders on an open and respectful basis and the changes required in internal culture to meet the changed circumstances.

Paul Braithwaite

26th December 2000