Blackrock has become the latest giant investor to back the London Stock Exchange (LSE) chairman ahead of a shareholder vote on his future next week.
Shareholders will vote on Tuesday on a resolution brought by activist investor Sir Chris Hohn which would remove chairman Donald Brydon. Hohn accuses Brydon of arbitrarily removing former chief executive Xavier Rolet and presiding over an inept succession process.
The decision by Blackrock, first reported by Sky News, means shareholders with well over 20 per cent of the shares in the LSE have publicly backed the chairman.
Blackrock is the world’s largest investment firm, with almost $6 trillion in assets under management and a holding in the LSE of more than 10 per cent.
Yesterday the Qatar Investment Authority, also a 10 per cent shareholder, added its support, along with last week’s announcement of their support for Brydon from Aviva.
Read more: Pirc says abstain on LSE “governance crisis” vote but Qatar backs chairman
Two influential investment advisory groups, Glass Lewis and Institutional Shareholder Services, have also recommended a vote in favour of Brydon staying.
However, Hohn, who runs The Children’s Investment (TCI) fund, has received some support from another group, Pensions and Investment Research Consultants (Pirc), who refused to back Brydon. Pirc recommended an abstention, citing concerns about the “governance crisis” at the FTSE 100 firm.
The vote stems from the resignation of Rolet at the end of last month. The LSE had initially planned for Rolet to retire in a year’s time, but their explanation for why the chief executive was leaving did not satisfy Hohn, whose firm holds five per cent of the shares.
Hohn subsequently accused the firm of gagging Rolet, and requested a shareholder meeting in order to reinstate Rolet and sack Brydon.
Blackrock declined to comment.
Read more: Glass Lewis says LSE chairman Brydon would ‘destabilise’ search for CEO