Equitable non-exec queried lack of FD

Non-execs on the board of Equitable Life were concerned that the mutual did
not have a finance director, it emerged yesterday.

David Wilson, currently being questioned in the society’s multi-billion pound
court case against former directors and auditors at the High Court, said that he
had asked Roy Ranson, Equitable’s former chief actuary and managing director,
why the society did not have a full-time finance director.

‘This [was] a business where – unlike most businesses, which would have a
designer, an engineer, production director, sales director, finance director,
there would be all these disciplines – in Equitable, in effect, the only
discipline was actuarial, plus sales, which in the latter time of my time on the
board did not warrant a directorship. So it is an entirely different concept to
what one has experienced elsewhere,’ Wilson told the court.

Wilson said that he had been comfortable with the information Ranson had
provided, just confused as to why Equitable had not had a full-time FD: ‘it was
just a strange concept to me to have the actuaries arguing all matters finance.’

Wilson raised the matter in 1995 one year into his five years as a non-exec
at the mutual. Issues about Equitable’s guaranteed annuity rate problems arose
in 1998, with the society closing to new members in 2000 amidst financial

Wilson said Ranson’s reply was simply to say that ‘that really was not for
the Equitable’.

In time, Wilson said the issue went away: ‘ I think I probably, as time went
on, became more comfortable that these guys really did – you know, were sort of
experts in actuarial matters, and experts in finance as well.’

The case continues.

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