11 December '02 - Background briefing on Governance consultation by Paul Braithwaite:

Time is running out FAST on the consultation process for changing Equitable Life's awful, archaic constitution. Your submission must be with the Society not later than Monday December 16th. You can use E mail.

If you want to be fully informed, please read EMAG's detailed Governance submission of Oct 16th, click here to access.

In any event, E mail or write immediately to the Society to express your views as one of the owners.

The E mail address is : articlesreview@elas.co.uk or by post to:

The Company Secretary,
The Equitable Life Assurance Society,
Walton Street,
Aylesbury,
Bucks
HP21 7QW

This is an inordinately short consultation period - only four weeks after 239 years - on a particularly pathetic set of proposals by the Board.

You will recall that at the last AGM on May 27th, EMAG presented a petition signed by more than 16,000 members calling for urgent reform, in particular with regard to changing the number of members required to call a meeting, currently 10% (about 30,000 members) to 1,000 and to propose a resolution, currently 5% (about 15,000) to 500.

Did the Board listen and incorporate? NO.

The Board totally ignored KEY proposals and left these vital rules alone, despite having received a comprehensive set of proposals from EMAG four weeks before it circulated its own.

The Board also totally failed to address the iniquitous practices in voting for directors, of chairman's proxies and negative as well as positive votes. This has always ensured that no candidate that is not endorsed by the chairman ever stood any possible chance of being elected and we have, in consequence, simply replaced one autocratic regime with another.

At the last AGM, for example, although an estimated 42% of those who exercised mandated votes, voted for me to become a director. Even so, I still achieved the incomprehensible result of MINUS 52,000 votes - thanks to the chairman's proxies! Other mutuals have dropped these restrictive and self-serving practices. It's time the Equitable entered the new Millennium by doing the same. Do you really think that the fact that every single member of the existing Board owes his (and her) appointment to the ratification of the chairman has been beneficial to members?

The full set of Equitable Life's proposed changes is available on the Society's website in a PDF file at:

http://www.equitable.co.uk/et/market.nsf/web+pages/CorporateHome

under Memorandum and Articles of Association section, "consultation document". (N.B. we are not allowed to link into the Equitable website)

Most of what has been proposed by the board of the Society is innocuous and, frankly, trivial tinkering with which EMAG has no problem (re-election for directors aged over 70, overflow rooms at AGMs, video-linked board meetings).

But other proposals are questionable - AGMs to be held as late as end of June? In this computerised age, EMAG would like to see the AGM to be held earlier, not later, i.e. not later than the end of April.

The proposed change to regulation 24 is unclear. EMAG has consulted its members and 70% of respondents clearly favour voting weight proportional to the size of one's guaranteed fund. Whilst it is unclear, the Board new proposal at 24 appears to say that eligibility merely to vote at all will be set at a level to be determined by the board.

A summary of the set of EMAG's proposals was mailed to EMAG members in mid October and the complete set of proposals to the Equitable's board at the same time.

The sins of omission?

Please address, in particular, your views on what has been left out.

There are several very major issues that are totally unaddressed that EMAG feels should be incorporated and we urge you to consider raising in yoursubmission:

• Abolition of negative voting for directors and instead, the adoption of appointing directors with "first past the post" and no chairman's proxies.
• In order to call a meeting: 1,000 members and to propose a resolution: 500 members
• Ensure that the board provides comprehensive financial information that meets the contemporary forward-looking standards proposed by the FSA
• Voting weight to be in proportion to the size of each member's guaranteed fund.
• Limiting the number of directorships that can be held by any Equitable Life director to not more than five other directorships
• Undertake to provide members with valuations and an explanation of the calculation of the figure on request

See also Alex's Henney's summary paper click here to access.

Paul Braithwaite
EMAG, General Secretary

P.S.: That E mail address for submission is: articlesreview@elas.co.uk