(Bloomberg) -- London Stock Exchange Group Plc’s directors should be prepared to confront “behavioral and performance issues” among management, according to a review that absolved its board of blame in the acrimonious departure of former Chief Executive Officer Xavier Rolet.
Rolet abruptly left LSE in November amid a battle between the 217-year-old bourse’s board and activist investor TCI Fund Management, which wanted Rolet’s contract extended and sought to oust Chairman Donald Brydon instead. The board subsequently commissioned Simon Collins, the former U.K. chairman at KPMG, to review what happened.
The review found that “even with hindsight, the board did not act improperly and alternative approaches to Mr. Rolet’s succession would still have caused disruption,” Brydon said in a statement to the company’s annual meeting Tuesday. The LSE should engage more widely with shareholders, and not just through its CEO, the review said.
Rolet had originally said he would leave in 2018, but resigned early following a request from the board. TCI claimed Rolet, who led a sixfold rise in the stock price, was pushed out against his will and was being threatened by reputational damage, while U.K. press reports said the board planned to release a potentially negative dossier on Rolet’s management style.
The LSE has since hired David Schwimmer, former head of market structure at Goldman Sachs Group Inc., as its next CEO.
Collins’s review said that in future, the board should “set out a clear picture of the culture and behavior it desires” and “ensure that each director has an ongoing appreciation and understanding of any behavioral or performance issues in management,” and confront those isssues when they occur, without making a reference to Rolet specifically. The board should also regularly discuss succession plans with the CEO, the review said.
“It’s inappropriate to go into the detail of all that happened,” Brydon said.
LSE also reported results earlier Tuesday, posting a 13 percent increase in first-quarter income amid record volumes at parts of its LCH division, the world’s largest clearinghouse. The company said it had 750 million pounds ($1 billion) to use for “general corporate purposes.”
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