Lloyds Banking Group chairman Sir Victor Blank, group executive director Archie Kane and deputy chairman Sandy Leitch are all up for re-election to the Lloyds board at its 2009 AGM on June 5, although Blank recently announced that he would step down ahead of the 2010 AGM.
But Manifest, a proxy voting service, has told clients that it has concerns about the chiefs in the wake of the HBOS buy out and warns that Blank’s resignation may not be enough to satisfy shareholder.
It says the admission by Lloyds chief executive Eric Daniels to a Treasury select committee that the bank did not do as much due diligence as it would have liked on HBOS calls the legitimacy of the directors into question.
Manifest told Lloyds voters: “Irrespective of the political pressures surrounding the transaction at the time, Daniels’ admission raises fundamental questions in our mind. It’s a given in business that directors must take risks in an attempt to earn profits for the company, however, the failure to conduct the typical level of due diligence for a transaction of this nature, publicly acknowledged, may leave the directors open to negligence suits.”
It adds: “Manifest has significant concerns about the continued service of those directors who sat on the board during September 2008 when the HBOS deal was proposed and subsequently transacted.
“Resolutions to discharge directors from their liability are common in many other European countries, but are not required in the UK. Were such a resolution to be required in the UK, we doubt that the Company would win such a vote in these circumstances.”