It’s happening – the date is set for a special general meeting (SGM) at which shareholders of R&Q Insurance Holdings get to vote either in favour or against the resolutions put forward by Phoenix Asset Management Partners.
Phoenix, which represents 46 million ordinary shares in the non-life insurance group, wants R&Q executive chair William Spiegel removed and co-founder Ken Randall to make a comeback. Phoenix is seeking that Randall, who retired last year, become an R&Q executive director while installing an independent non-executive chair.
R&Q agrees that an independent non-executive chair should be appointed but has misgivings about getting Randall back onboard at Spiegel’s expense.
“William Spiegel’s replacement by Mr Randall could raise significant retention and recruitment concerns regarding senior management and employees,” stated the firm when it announced that the SGM is taking place on September 13 in London. “William Spiegel’s direct reports have fully endorsed his strategy.
“If Mr Randall replaces William Spiegel, or comes back into the business as proposed by Phoenix, then there is a very serious risk of many, if not most, of William’s direct reports (including the CFO) and a number of other senior executives choosing to consider their own positions given their belief in R&Q’s existing culture and strategy.”
R&Q continued: “Were this to happen, this would clearly have negative implications for the company’s client and broader commercial relationships, as well as ongoing essential transformation projects to strengthen the business. In the board’s view, such a leadership change would also make it more difficult to recruit for important essential roles within the company.”
The organisation – whose board is recommending that shareholders vote against Phoenix’s proposals at the SGM – went on to stress that the management team led by Spiegel has “transformed” R&Q from a balance sheet-led, capital-intensive business model to a more simplified fee-based enterprise.
“Today,” it said, “R&Q is a simpler business for investors to understand and is significantly better positioned to deliver more predictable and less volatile earnings, reduce retention of underwriting risk, and generate higher shareholder dividends over the longer term.”
The R&Q board is of the view that changes in management and/or strategy at this point would destabilise the business and its people, destroy value, and undermine the board’s independence. It also believes that no sound justification has been provided by Phoenix, whose resolutions are supported by fellow shareholder Brickell PC Insurance Holdings. Additionally, supposed potential conflicts of interest were cited by R&Q.
“The board is aware of significant historical and ongoing relationships between Mr Randall and certain major R&Q shareholders, specifically Phoenix, Brickell, and 777,” reads part of R&Q’s SGM notice.
“These relationships have included: (i) Mr Randall’s visible role on the failed acquisition of R&Q by Brickell, where he led a number of key due diligence calls on their behalf; and (ii) discussions that the company has been informed took place in 2021 between Mr Randall, Phoenix, and Brickell/777 for the purposes of funding a US special purpose acquisition company.”
The planned sale of R&Q to Brickell fell through in May – the proposed transaction not only failed to gain the required shareholder nod, but Brickell also backed out over an alleged breach by R&Q of their agreement.
Meanwhile, on the Phoenix issue, R&Q highlighted: “The board has considered carefully and worked diligently to improve R&Q’s corporate governance for the benefit of all shareholders.
“In that context, the board has serious concerns that the replacement of William Spiegel by Mr Randall (as proposed by Phoenix and supported by Brickell/777) would be a backwards step as potential conflicts of interest, including with respect to Phoenix, Brickell and 777, could materially prejudice Mr Randall’s ability to act impartially in the best interests of all shareholders.”
Randall stepped down as group chief executive of R&Q in 2019 to take on the role of executive chair while the positions of joint CEOs were created. In January 2020, one of the joint chiefs resigned with immediate effect. Spiegel succeeded Randall in 2021 when he left three decades after co-founding the business with Alan Quilter.
