By Svea Herbst-Bayliss
BOSTON (Reuters) – Insurance company Argo Group International Holdings said on Thursday that it will add one board member nominated last year by Voce Capital Management and give the hedge fund a say in seating two new independent directors in the coming months.
Carol McFate, who has held executive positions with a number of insurers and was a former chief investment officer at Xerox, will join the Argo board immediately and serve on its nominating corporate governance committee and an additional committee.
Voce will also participate in identifying and evaluating two new director candidates who will stand for election at the 2020 meeting and one of them will be selected from Voce’s nominated slate, the company said in a statement.
The announcement comes three weeks after Argo said five directors, including the chairman, will leave its board at this year’s annual meeting, marking a critical turn in a bitter corporate battle that has been dragging on for months.
A company spokesman declined to comment beyond the statement.
Over the last three months, Argo announced that its board chairman, Gary Woods, would leave, that CEO Mark Watson was retiring and would leave the board by the end of 2019 and that the Securities and Exchange Commission was investigating the company. Argo also said it was conducting a review of “governance and compensation matters.”
Besides Woods, Sedgwick Browne, who heads the Risk & Capital Committee, Hector De Leon, a member of the Audit and Human Resources Committee, Mural Josephson, chair of the Audit Committee and John Power, chair of the Human Resources Committee will also depart at the annual meeting.
Earlier in 2019, Voce said it would run a proxy contest and planned to seat five directors, including McFate. It said the company should cut $100 million in expenses, including corporate jets and housing for Watson, and said the board was responsible for a “culture or indulgence.” In November Voce said it had started the process of calling a special meeting to replace five directors, including Woods, the chair.
On Thursday, Voce sounded a positive note and praised the company for the steps it has taken. Tapping new board members “and the Company’s ongoing governance improvements, are substantive and positive developments that give us confidence in the new course that Argo has charted,” Voce’s portfolio manager J. Daniel Plants said in a statement.
Plants’ Voce owns 5.8% of Argo. The fund gained roughly 12% in 2019.
(Reporting by Svea Herbst-Bayliss; Editing by Andrea Ricci)