London Stock Exchange Group PLC (LON:LSE) on Tuesday said it has put new steps in place for the succession of future chief executives following a fallout over the departure of Xavier Rolet in November.
Rolet's departure as chief executive had incited outrage from investor Sir Christopher Hohn, who claimed he was forced out and shareholders needed to know why.
Hohn, who founded The Children's Investment Fund (TCI), which owns more than 5% of the exchange, called on chairman Donald Brydon to step down as chairman. However, shareholders voted to keep Brydon in the role at an extraordinary meeting in December.
In an annual general meeting statement on Tuesday after the LSE published its first quarter trading update earlier in the day, Brydon acknowledged that the "events leading to the departure of Xavier Rolet received widespread attention".
He said a review into the issues surrounding Rolet's departure concluded that directors should confront any "behavioural or performance issues" in management.
The review recommended that succession should be a "periodic topic of discussion" between the board and the chief executive, and that management should "set out a clear picture of the culture and behaviour it desires across the group and embed this across its internal policies".
Other proposals included adopting a balanced scorecard to assess performance for salary and rewards, confronting issues in "a rigorous and formal" manner and wider engagement with shareholders.
"These conclusions have all been accepted by the board and procedures and processes to ensure that they are embedded in our future work are being established," Brydon said.
Earlier this month, the LSE announced the appointment of David Schwimmer as its new chief executive.
READ: Will the London Stock Exchange win back friends in the City following the appointment of new chief exec?
Schwimmer, who joins from Goldman Sachs, will take the reins from Warren on August 1.
LSE reports rise in first quarter income and revenue
Separately on Tuesday, the LSE reported a 13% increase in first quarter total income, buoyed by double-digit growth in its information services, LCH Clearnet and capital markets units.
Total income in the three months to March 31 rose to £520mln from £461mln the same period a year ago.
Organic revenue at constant exchange rates edged up 11% to £470mln from £423mln.
Shares rose 0.5% to 4,237p in late morning trade.
The information services division delivered an 11% rise in organic revenue on the back of growth at FTSE Russell, which provides stock market indices.
The FTSE Russell took full ownership of FTSE TMX Global Debt Capital Markets Limited, which provides fixed income indices in Canada and UK government bond indices, in the quarter.
Organic revenue from post-trade services at LCH Clearnet, the group’s clearing house, increased 13% with 15% growth in over-the-counter from record volumes at SwapClear and ForexClear.
The LSE bought a further 2% stake in LCH during the period, taking its total holding to 68%.
"We expect the LSE to deliver ongoing top line growth backed by these two structural growth engines in information services (17% 2016-19E revenue CAGR [compound annual growth rate]) and Post Trade: (LCH 14% revenue CAGR), said RBC Capital Markets.
The broker added: "With numbers in line with our expectations, we leave our estimates and price target of 4,600p unchanged and reiterate our 'outperform' rating on LSEG."
The capital markets arm, which offers access to capital for businesses and electronic platforms for secondary market trading of equities, bonds and derivatives, posted a 13% gain in organic revenues. The division was supported by “good” primary markets activity and higher equity volumes in secondary markets, the LSE said.
In the technology services division, however, revenue declined 5% on an organic basis or 37%, including the disposal of the MillenniumIT ESP and Exactpro trading technology businesses.
“The group is strategically well placed to further develop its many growth opportunities, working in partnership with our customers,” said interim chief executive David Warren.