LGIM and CalSTRS voted against Aviva’s Wilson over BlackRock directorship

Analysis of voting records reveal concerns over conflict of interest

It’s emerged that Legal & General Investment Management voted against the re-election of Mark Wilson at Aviva — who has resigned today as CEO of the insurance and asset management group — over a perceived conflict of interest tied to his board seat at BlackRock.

LGIM stated in its voting records: “A vote against is applied due to concerns regarding the conflict of interests with the CEO’s new role at BlackRock, and the lack of disclosure as to how these conflicts will be managed on the board.”

The re-election of Wilson was supported by more than 96% of the votes. Both BlackRock and LGIM, are major shareholders in Aviva with over 5% and 2% shares respectively.

The California State Teachers’ Retirement System, with assets totalling $227.6bn also voted against Wilson, as well as the whole Aviva board.

A spokesperson told RI that CalSTRS generally votes in support of a director unless the proxy statement shows circumstances contrary to the fund’s Corporate Governance Principles.

Those include: “A potential conflict of interest due to other directorships or employment, providing legal or investment banking advice, serving on more than four public boards, poor board meeting attendance (less than 75%), or a lack of board independence or board diversity,” the spokesperson stated.

Proxy advisors Glass Lewis and ISS, as well as UK pension consultant PIRC, recommended a vote for Wilson. ISS noted that, while not a “voting concern at this time” Wilson’s appointment “will be kept under close review”.ISS observed that there is no statement within Aviva’s Annual Report “as to how any potential conflicts of interest are and will be managed”.

It added: “There may also be a potential conflict of interest given that a business unit of the company – Aviva Investors – competes directly for business with BlackRock. It is interesting to note that he was appointed to the Board of BlackRock Inc. by way of referral from BlackRock’s CEO [Larry Fink].”

“Concerns regarding the conflict of interests with the CEO’s new role at BlackRock”

The board of Aviva was comfortable with the appointment because Aviva Investors and BlackRock are not deemed as direct competitors, because Wilson did not sit on Aviva Investors’ board or is involved in operational matters, and because there are protocols in place to avoid any potential conflict of interest.

LGIM and Aviva declined to comment.

Wilson will be placed on gardening leave for six months as of today. Sir Adrian Montague, the non-executive Chairman, is assuming executive responsibilities until Wilson’s successor is hired.

Wilson, one of the few corporate leaders to have addressed the UN General Assembly, has been a sponsor of Aviva Investors’ sustainable finance activities. For example he was in New York recently lending his weight to the World Benchmarking Alliance.