View more on these topics

&#39Directors kept in the dark by management&#39

Equitable Life&#39s management and former board have come under heavy fire in the Penrose report, with former directors described as being inadequately skilled to know they were being kept in the dark by the management team.

In his key findings, Penrose identifies that as early as 1983 the society&#39s executive management had decided to meet the cost of its annuity guarantees from final bonuses, a decision not communicated to the board until 10 years later and not to policyholders until 1995.

He describes Roy Ranson, who between 1982 and 1992 was the appointed actuary and from 1992 to 1997 was both appointed actuary and chief executive, as “highly intelligent and articulate, but manipulative” and “autocratic”.

Penrose says the board was presented with technical and financial information but in a fragmented way so that it was unlikely to be able to build up a picture of the society&#39s overall situation.

Ranson&#39s successor as app-ointed actuary in 1997 was Chris Headdon, who took over as chief executive when Alan Nash resigned in 2000. Penrose says he did not “make good” the lack of information and advice on actuarial matters that occurred in Ranson&#39s time.

Penrose describes the skills of Equitable&#39s former board as inadequate for the job, believing it never got to grips with the society&#39s financial situation.

He says: “Equitable&#39s non-executive directors were so wholly dependent on actuarial input from the executive and in particular the chief executive/actuary that they were largely incapable of exercising any influence on the actuarial management of the society.”


Survey prompts FSA to educate school leavers

The FSA is looking to educate young people about financial services at times such as leaving school, starting a first job or going to university as it says these activities require the need for financial products, services and money management skills. The decision comes after an NOP study commissioned by the FSA found that young […]

&#39Debate the issues in Parliament&#39

Equitable Life chief executive Charles Thomson is urging the Parliamentary Ombudsman to reopen her inquiry into the society following publication of the Penrose Report. Thomson says that Parliament must fully debate the issues raised by Lord Penrose in a bid to draw a line under the suffering of policyholders. But he has expressed frustration that […]

Skills council chief accuses critics of &#39a bad fact-find&#39

The new managing director of the Financial Services Skills Council has hit back at critics, saying they have done a “bad fact-find” on what the body is trying to achieve through its review of exams. The comments come in response to industry attacks alleging that the skills council&#39s approach is dumbing down the industry by […]

Reid all about it

Last week saw the latest sting on the Financial Services Compensation Scheme when a company neatly sidestepped its liabilities in a series of moves that would put a chess grandmaster to shame. For nearly a year, we have seen legal firms tutoring IFA firms in this cleansing process. Out of curiosity, I attended one of […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm