“Seriously unfounded, inaccurate, and misleading” – those were the words used by global reinsurer SCOR to describe declarations released by activist investor CIAM, which is calling for chairman and chief executive Denis Kessler’s exit from the board.
The asset manager is recommending the split of the dual role, stressing that it is not asking for a new boss but for the appointment of an independent chair from among the existing directors. CIAM, which manages funds that hold 0.94% of SCOR’s share capital, claims that removing Kessler from the board would not affect his CEO position.
In a presentation for shareholders, the activist fund asserted: “One person combining both roles results in too much power, particularly as the board elects, revokes, evaluates, and determines the level of compensation of the CEO. An independent chairman eliminates the conflict of interest that inevitably occurs when a CEO is responsible for self-oversight.
“An independent chairman will ensure that board meetings encourage board members to share their viewpoints and raise questions that challenge and cause the CEO to consider different approaches, delivering long-term value for all stakeholders.”
In response, SCOR’s board of directors “unanimously decided to reiterate its full support” to Kessler. The reinsurance group, whose annual general meeting is slated for April 26, issued a statement urging shareholders to reject CIAM’s proposal.
“The board of directors of SCOR considers that the governance model with a chairman and chief executive officer has proven relevant over the past years, as showed in particular by the performance of the group,” stated the France-headquartered enterprise.
“The combination of the positions of chairman of the board of directors and chief executive officer has in particular allowed SCOR to benefit from efficient decision-making process and a strategic alignment of its governance bodies.”
SCOR said this analysis is fully shared by a vast majority of its shareholders, which in 2017 renewed Kessler’s office as director for a term of four years with over 80% of favourable votes. The company added that his remuneration is “perfectly transparent” and is determined using methods that strictly comply with applicable laws and the best corporate governance practices.