The Local Authority Pension Fund Forum has written to the London Stock Exchange to complain about its chief executive Dame Julia Hoggett’s push to reform listing rules
The Local Authority Pension Fund Forum (LAPFF), representing 87 local council pension schemes, has launched a new offensive against the London Stock Exchange (LSE) over what it perceives as an attempt to lower boardroom standards for listed companies.
The group expressed its “resolute” concerns about LSE chief executive Dame Julia Hoggett’s recent drive to reform listing rules. In addition to her role at the LSE, Dame Julia heads the Capital Markets Industry Taskforce (CMIT), an industry body that has opposed efforts to bolster the UK’s corporate governance code.
This includes proposed regulations requiring firms to report on Environmental, Social and Governance (ESG) metrics, which were ultimately abandoned earlier this year. Dame Julia has also publicly voiced her belief that stock exchange CEOs are underpaid compared to their American counterparts, leading to fears that pay governance rules could be diluted.
This includes a rule requiring companies to consult with shareholders when more than 20% of them object to directors’ pay. Doug McMurdo, chairman of the local authority funds group, wrote that the push “does not present the requisite analysis and/or evidence that would stand up to market rigour. It is on this basis we remain firm”.
The letter, penned on August 30, marks the third occasion the forum, which oversees £350bn in assets, has raised concerns about the issue. Meanwhile, the CMIT has argued that easing listing rules will attract more company founders to choose London as their desired location to float on the stock market, rather than alternatives such as New York.
The stock exchange has faced criticism for a lack of companies listing in London in recent years, particularly after British microchip company Arm snubbed the exchange for the US in 2023.
However, Mr McMurdo has countered: “We would point out that the cost of capital is set by investors in the markets, not lawyers, nor the sell-side, yet those are the only interests that have been represented by the CMIT, in our view. It is a case study in how governance of capital markets should not be conducted.” The LSE Group has been solicited for a statement.
