Willis Towers Watson board shake up prompts executive exits, ex-Lloyd’s CEO Beale and others step in amid investor push

Re/insurance broker  Willis Towers Watson has refreshed its board of directors following pressure from one of its largest investors as it looks to turnaround business after the collapse of its mega merger deal with rival Aon. The move will see the departure of four key executives, making way for former Lloyd’s CEO Inga Beale (pictured) and three others that will soon join its board.

Following “constructive” discussions with activist investor Elliott Management, the broker has decided to appoint Beale - chief executive officer of Lloyd’s of London from 2014 to 2018; Michael Hammond - former chair and CEO at Lockton group of companies, as well as CEO of JLT Risk Solutions and Marsh UK; Michelle (Shelly) Swanback - president of product and platform at The Western Union Company; and Fumbi Chima - former chief information officer of Adidas/Fox Networks/Walmart Asia and currently CIO of Boeing Employees’ Credit Union.

Three of the four new directors (Beale, Hammond and Swanback) will join the board on January 1, 2022, concurrent with the transition to Carl Hess as the new CEO. While Chima will join on April 1.

In order to facilitate the director transition process, Jaymin Patel and Victor Ganzi have decided to step down from the board. Patel will leave the board on January 1, while Ganzi will continue to serve as a member of the board and as chair through the end of his current term, which runs until the 2022 annual meeting of shareholders.

CEO-in-waiting Hess will join the board on January 1, 2022 when John Haley steps down from the board at the end of his contract term. The board will then be composed of 12 directors once Chima joins in April.

Willis stated that the board’s focus on director succession will continue during 2022, in order to reduce the size of the board back to nine directors. This would mean, two other current Willis Towers Watson directors will not stand for reelection at the 2022 shareholders’ meeting. The board will then be composed of nine directors, five of whom will be new.

Furthermore, WTW board will establish an Operational Transformation Committee (OT Committee) that will make recommendations to the full board regarding the oversight of management’s initiatives to drive operational efficiencies and help oversee the implementation of the company’s operational transformation plan, which aims to achieve $300 million or more of run rate cost savings by the end of 2024. The initial members of the OT Committee will be Beale, Hammond, Swanback, and Paul Thomas, an existing member of the board.

“We have been very pleased with the response of Willis Towers Watson shareholders, including Elliott, to the strategic plan discussed at the Investor Day and the leadership transition,” said Victor Ganzi, the chairman of the board of Willis Towers Watson. “We look forward to continuing to engage with Elliott and our other shareholders as we continue the process of refreshing the Willis Towers Watson Board and moving forward with our strategic plan to enhance the value of the Company for the benefit of shareholders,” he added.

Mark Wills, portfolio manager at Elliott, said: “We welcome the appointment of Ms. Beale, Ms. Chima, Mr. Hammond and Ms. Swanback to the Board. We believe these four outstanding independent directors have the right combination of skills and experience to support the Company’s efforts to drive superior shareholder returns. The Company’s focus now turns to successful execution and Elliot looks forward to continuing our constructive engagement with Willis Towers Watson and to supporting the Board as well as Carl and the management team in the coming months as they implement the Company’s strategic plan.”

Haley stated: “We are very excited about our strategic plan and the value that we think that it will deliver to Willis Towers Watson shareholders. We very much appreciate the support of Elliott and all of our investors. As I near my retirement, I look forward to working with Carl, the management team and the refreshed Board to continue the transition and best position the Company for continued value creation.”

Ganzi commented: “We are very pleased to have Ms. Beale, Ms. Chima, Mr. Hammond and Ms. Swanback join the Board. Collectively, they add to the Board a deep and broad base of knowledge and a wide diversity of experience and skills. We are confident they will add significant value to the Board through their insights into the opportunities and challenges the Company is facing as it moves forward with its strategic plan.”