Argo and Voce agree deal over board to quell hostilities

Argo Group, underwriter of specialty insurance and reinsurance products, has unveiled a deal with activist investor Voce Capital Management, leading to a cessation of hostilities.

A statement from Argo said that as part of the agreement, Carol McFate will join the board, subject to regulatory approval and completion of customary, confirmatory due diligence.

McFate will take on the role of CEO, stepping into the shoes of former CEO and director Mark Watson, whose exit was announced in November 2019. She will also join the board’s Nominating and Corporate Governance Committee and an additional committee which will be chosen by the board.

Under the deal, Voce will also work with Argo’s Nominating and Corporate Governance Committee to choose two new independent director candidates to stand for election at the firm’s 2020 shareholder annual general meeting.

“One of those two new director candidates will be selected from the slate of individuals nominated by Voce for election at the requisitioned special general meeting of Argo’s shareholders,” the company said.

Argo said the agreement had led Voce to agree to “certain customary standstill provisions and to withdraw its proxy solicitation to seek board changes at a requisitioned special general meeting of shareholders”.

McFate will bring extensive global insurance and financial expertise, the company said. Previously she has held the roles of chief investment officer at Xerox Corporation (from 2006 to 2017), where she oversaw more than $12 billion in retirement investment assets for North American and U.K. plans. Before that she was executive vice president and global treasurer for XL Global Services, a subsidiary of XL Capital, a Bermuda-based global insurance and reinsurance company. McFate has also held various senior executive positions with AIG and The Prudential Insurance Company of America.

Thomas Bradley, chair of Argo’s Nominating and Corporate Governance Committee, said: “We are pleased to have reached a constructive agreement with Voce and value their input as we continue to enhance our board composition and governance practices.

“We are pleased to welcome Carol to the board. Her strong leadership and executive experience in the insurance and investment management industries will help drive continued value creation for our shareholders.”

Daniel Plants, founder and chief investment officer of Voce, said: “We made a substantial investment in Argo because we believe it has significant untapped value that can be realised. The appointment of Carol McFate to the board, the addition of two other independent directors selected with Voce’s input, and the company’s ongoing governance improvements, are substantive and positive developments that give us confidence in the new course that Argo has charted. We look forward to working with Argo’s board and management in the shared pursuit of creating value for all shareholders.”

The deal between Argo and Voce will be filed on Form 8-K with the US Securities and Exchange Commission.