News Flash: Roger Maynard, the previous Chairman of the two BA pensions schemes, has now been replaced by Paul Spencer CBE
Paul is a Non-Executive Chairman of State Street Managed Pension Funds which now manages the £14 billion BA pension funds. He is also a Non-Executive Director of WPP Group plc, NipponKoa Europe Insurance Limited and TR Property Investment Trust PLC. He also acts as Chair of the Investment Committee and Independent Trustee for BAT plc Pension Fund, the BT Pension Fund and for Rolls-Royce plc Pension Fund Independent Trustee, as Chair of Trustees and of Investment Committee. He was associate director and treasurer of Hanson plc from 1986 to 1996 and Group Finance Director and subsequently Chief Executive UK of Royal and Sun Alliance plc from 1996 to 2002. He is a past President of the Association of Corporate Treasurers. Appointed CBE in 2010 New Year’s Honours ‘for services to financial services’. (22 March '10)
OPA Press Release 14 Dec '09:
Perception does matter - Roger Maynard steps down
Perception is often as important as reality and when that perception is damaging a company like British Airways, it is time for a change.
One of the sticking points in the proposed merger of BA and Iberia has been BA’s pension deficit and how that deficit would be dealt with.
For the past month, the OPA has been asking BA to review the multiplicity of roles undertaken by Roger Maynard. Mr Maynard, as BA’s Director of Investments and Alliances and Chairman of BA’s board of pension trustees and as a director of Iberia, at the very least gave the impression of a conflict of interest.
The OPA continue to believe that there was a definite conflict of interest attached to Mr Maynard’s differing roles, so the OPA is pleased that Mr Maynard has taken the honourable course and will be relinquishing his role as Chair of the pension scheme trustees. Assuming the same appointment slip-up is not made again, members of the pension scheme should have renewed confidence in the independence of the chair’s role and that the position of the schemes chairmanship will no longer be compromised.
Roger Turner
Executive Officer OPA
OPA Press Release issued on 18 November 2009:
The need for an independent chairman
Once again the need for an independent chairman for pension schemes is demonstrated by the recent example of the Chairman of the trustees of the British Airways schemes claiming that there is no conflict of interest in their current negotiations. He is a company director who has been closely concerned with the tie-up with Iberia and cannot therefore be seen as someone who can at the same time represent the interests of all the schemes’ members and also those of the company. It is totally unreasonable to believe otherwise.
The OPA fully supports the Association of British Airways Pensioners in calling for Roger Maynard’s resignation and for the Pensions Regulator to appoint an independent chairman.
The OPA has long advocated independent chairmen for trustee boards and at present only one third of the trustee boards of FTSE 100 companies have an independent trustee as chairman. A recent study by GAAPS also found that out of the remaining two thirds, 50 per cent are directors or senior managers of the company that funds the scheme, and the other half are ex-directors. Most trustees are still finance directors of the sponsoring company or their colleagues.
The time has come for both the issues of independent chairmen and conflicts of interest on trustee boards to be adequately dealt with by legislation.
Roger Turner
Executive Officer, OPA
Tel: 01582 721 652
Background: The OPA policy on pension scheme governance, and in particular the need for an independent chairman, can be found here.
Response: British Airways, as reported in the Times, 19 November '09, replied: "On the basis of legal advice and the fact that Roger Maynard played no part in the pension provisions outlined in the memorandum of understanding signed with Iberia, we are confident that there has been no conflicts of interest."
To which the OPA has responded (19 November '09) as follows:
The need for an independent chairman – still remains!
It is becoming increasingly difficult for British Airways to square the conflict of interest circle when it comes to the position and role(s) of Roger Maynard.
The Pensions Regulator covers Conflicts of Interest in some depth on its website:
‘’Conflicts of interest are a serious concern for the regulator. They arise in the trustee governance model because many trustees have a stake in the scheme or its sponsoring employer. If not managed effectively decisions may be taken that put the interests of beneficiaries at risk, or subsequently prove to be invalid.’’
The advice goes on to say
‘’The regulator recognises that it can be beneficial to appoint senior staff of an employer as trustees, particularly in terms of knowledge, expertise and experience. However, conflicts are inherently likely to arise before and after appointing staff of an employer as a trustee, particularly senior staff.’’
Mr Maynard has three jobs: he is BA’s Director of Investment and Alliances, Chairman of British Airways Pension Scheme and a director of Iberia.
The Regulator says ‘’… it is vital that decisions are not affected or tainted by conflicts of interest so that valid decisions are made, and are perceived to be made, in the beneficiaries’ best interests.’’ (My italics)
Appearance and transparency are essential, and even a hint of dubious decision making is unacceptable. British Airways may be confident there is no conflict of interest; the OPA is not. The OPA’s position remains that Mr Maynard’s multiplicity of roles at the heart of both British Airways and Iberia and the Pension Scheme means that his position is totally compromised, therefore untenable and he should go. Now.
Roger Turner
Executive Officer OPA
Tel: 01582 721 652 |
