The Bank of England governor, Mark Carney, has indicated that the chief executive of the London Stock Exchange should step down, after saying he was “mystified” by the continuing row about the departure.
Carney waded into the clash that has been going on for weeks, since a major LSE shareholder tried to block Xavier Rolet’s exit. The Children’s Investment Fund, which owns 5% of the LSE and has been leading the fight against his departure, called on the Bank and the Financial Conduct Authority to intervene. TCI wants the regulator to replace the chairman, Donald Brydon.
Carney was asked for his views as he presented the results of the latest bank stress tests, and said he was “a bit mystified about the debate”.
The Bank regards the LSE as an important part of the global financial infrastructure because it has majority ownership of the clearing house that stands behinds billions of pounds of financial contracts. Carney said the Bank had been kept informed about management changes.
“I can’t envisage a circumstance where a CEO stays beyond the agreed period. But it’s in the interest of all parties involved that clarity is provided as soon as possible,” he said.
Carney praised Rolet, who has been chief executive of the LSE since May 2009. His departure was announced in October. At the time, the LSE said a search for Rolet’s successor was under way and he would leave at the end of next year.
Carney said Rolet had “made an extraordinary contribution … [but] everything comes to an end”.
The LSE has a deadline of the end of Thursday to publish a circular in response to a demand by TCI for an emergency shareholder meeting to remove Brydon and end to the search for a new chief executive.
The circular may provide more details about the circumstances surrounding Rolet’s departure. Sir Christopher Hohn, the TCI founder, has said Brydon “failed to provide shareholders with any substantive basis for the removal of the chief executive”.
“Hiding behind confidentiality agreements denies shareholders the ability to review your actions and demonstrates the bad corporate governance over which you are presiding,” Hohn said.
The emergency meeting is expected to take place before Christmas.
Rolet, who has repeatedly warned that Brexit could cost the UK 232,000 financial services jobs, had been planning to retire if a deal to merge with German rival Deutsche Börse had been completed. The deal was blocked by the European commission in March, on the day the UK formally began its departure from the EU.
Neither the LSE or TCI would comment on Carney’s remarks.