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: 11/12/2002 - Alex Henney's Comments On The Board's Memorandum And Articles Review

11 December '02 - Alex Henney's Comments On The Board's Memorandum And Articles Review

The board's Review is trivial (see notes below). With the exception of increasing the number of people to nominate a person for the Board to 5, the proposed changes:-

  • ignored the wishes expressed by 16,179 petitioners who asked Treves to change the governance of the Society by changing the rules for calling an EGM and allowing members to propose a resolution at a general meeting:-
  From To
To call a meeting 10% of members (about 30,000) 1,000
To propose a resolution 5% of members (about 15,000) 500
  • entirely ignored the proposed changes made by EMAG aimed at:-

    • ensuring the proper provision of financial information to the standards indicated by the Financial Services Agency and the Sandler Review of Medium and Long Term Retail Savings in the UK
    • allowing members more democratic control over the Board by calling EGMs as per the petition mentioned above
    • ensuring the right of members to have full and accurate (i.e. non-spin and misleading) answers to questions at a general meeting
    • altering the voting arrangement to simplify it and to prevent the Chairman/incumbent board casting non-mandated votes that allows them effectively to control appointments to the Board so that they can operate as a self perpetuation oligarchy
    • providing full financial information to members on the valuation - and basis of valuation - of their policies. As I found out, the Society's response to requests for information on surrender and maturity values is:-

      "We do not provide details of how we arrive at surrender values. It is not a service we offer".

    • limiting the number of directorships held by a director. The current chairman is chairman of two other commercial undertakings and non-executive director of 20 companies, chairman of the London Business School, and is involved with various charitable organisations


Detailed comments on the Board's Review

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


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

Article No. Summary (Our opinion in bold)
1 Proposes updating the English of the Articles. Agree.

Proposes that the AGM can be held in June as well as in April or May. Disagree. May is quite late because the information in the Annual Report & Accounts is by then well out of date. June is worse.

24(1) and (2)

Administrative changes to the voting arrangements. Agree.

26(3) and 27

Abandoning the requirement for a proxy at a general meeting not to be a member is presumably linked to the proposal that directors are not members of the Society. We agree. The statement that "the form of proxy specified in the Articles should be updated to reflect modern practice is ambiguous" - what is "modern practice"?


Proxies should be entitled at general meetings to speak and to vote on a show of hand. Agree.


Forms of proxy can be returned to an address specified by the Board. Agree.


The maximum number of directors should be reduced to 12, and the minimum to 6. Agree.


The provision that "no person shall be qualified to be or become a Director unless he is for the time being a member of the Society" should be removed. As the Society will soon be a society for annuitants we have changed our view and now agree.

43, 44, 46, 48, 65, 39 and 58(1)

Require a "Special Board Meeting" to transact certain items of business. References to "Special" Board Meetings should be removed and all business should be conducted at 'ordinary' Board meetings. Not entirely agree. The purpose of the Special Board Meeting is to decide on bonus declarations, and the "Special" nature emphasises the importance of the decision and the responsibility of the Board for the bonus decision. The proposed change may be an attempt for devolution and side-stepping of responsibility onto the Appointed Actuary.


requires someone standing as a Director to have 50 people nominating him. Agree.

46 and 47

It should be stated explicitly in the Articles that the Board may appoint officers, employees and professional advisers; and may confer such powers upon such officers, employees and professional advisers as it thinks fit (unless the powers are specifically required by the Articles to be exercised by the Board). Agree.
65 This regulation should be amended to reflect that, in accordance with Financial Services Authority regulations, valuations are conducted by the Appointed Actuary. It should also require that such valuations be conducted annually (the requirement in the current regulation is at least once in every three years). Agree.

Other proposals cover:-

  • the possibility of overflow rooms for general meetings
  • representation at general meetings of members who are patients under mental health legislation, or subject to an order of a court to protect people unable to manage their own affairs. (There is no current regulation relating to this topic)
  • the appointment of a director is subject to FSA approval
  • any director over 70 should be subject to re-election at each AGM
  • Board meetings can be held over the telephone or by video link Agree