By Martin Simons: Published: October 27 2006 03:00 | Last updated: October 27 2006 03:00
From Mr Martin E. Simons.
Sir, John Plender’s article on US litigation against BP executive directors (“America’s litigation habit threatens to spread”, October 20) and Jon Moynihan’s letter (October 24) should be compulsory reading for Dutch, US and UK fund managers and private shareholders everywhere.
I raised the issue of Dutch and US pension funds suing Royal Dutch Shell directors about energy reserve misstatements at the company’s recent annual meeting where I suggested that shareholders should consider launching class actions against relevant US lawyers. Even better, BP and Shell should announce that if the plaintiffs were successful pro rata payments would be made to all shareholders.
Apart from the cost of defending BP’s officers there are substantial opportunity costs. BP has enough on its plate without being troubled by vexatious litigation. It is troubling that the trustees of the London Pensions Fund Authority appear to be supporting this legal action (report, October 10). The authority reports to Ken Livingstone, London’s mayor, who will presumably take cognisance of the distaste of their action.
Mr Plender raises another vital matter – the danger of US-type board structure creeping into UK quoted companies. The huge preponderance of non-executive directors at US companies has not prevented a rash of financial scandals, while predated share options are harming US corporate governance.
Martin E. Simons,
London SW15 6HJ
Copyright The Financial Times Limited 2006
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