Lloyd's of London says ex-CEO broke rules with undisclosed relationship

By Kirstin Ridley

LONDON, July 22 (Reuters) - Lloyd's of London said an undisclosed relationship between former CEO John Neal and a female employee had breached its compliance policies, adding on Wednesday that his behaviour at the commercial insurance market fell "significantly" below expectations.

A year after Neal's exit, the Council of Lloyd's, which deals with management and supervision, found the relationship had been "sufficiently close during their employment ... that it could be viewed as creating a perceived conflict of interest".

There was no conclusive evidence that Neal and Rebekah Clement, the former corporate affairs director, were involved in a romantic relationship while at Lloyd's and no evidence that her promotion had been mishandled, it said.

But Neal's conduct fell "significantly below the standards expected of Lloyd's senior leaders and was detrimental to the interests of the corporation and Lloyd's market", the council said.

Clement, meanwhile, should have "modified her behaviour" and disclosed the perceived conflict of interest, it added. Clement's lawyer said she was now considering legal action.

Neal, who was CEO of Lloyd's for more than six years, said he was pleased, but not surprised, that the investigation found no inappropriate relationship.

"I would have hoped less time and resource had been spent in reaching a conclusion on the central question that was, in truth, never in doubt," he told Reuters on Wednesday.

"I am disappointed with the other findings and do not accept them, but I'm glad that all parties are now able to move on," he added in a WhatsApp message.

CLEMENT CONSIDERS LEGAL ACTION

Clement's lawyer Shah Qureshi at law firm Irwin Mitchell said she was considering legal action. He said she was not surprised that Lloyd's found no evidence of an inappropriate relationship with Neal, nor any evidence of any failings relating to her promotion.

Despite her cooperation with the investigation, Lloyd's had made findings against her on the pretext of perception, on the basis of "rumour, gossip and innuendo", he said.

"For over a year there have been repeated leaks and press briefings about Rebekah, without warning or regard for the damage done to her career, reputation and health," Qureshi said.

"While Rebekah is pleased that this protracted investigation has come to a close, she has put Lloyd's and its senior officers on notice that she is considering legal proceedings," he added. 

A Lloyd's spokesperson said the corporation stood by its statement and findings.

RAISING CONCERNS

An expanded investigation, including interviews with nearly 40 witnesses, into the alleged personal relationship between Neal and Clement was launched in November after both had left, which the council said hampered its ability to obtain potentially relevant information.

Senior Lloyd's individuals had raised concerns directly with Neal about the nature of his relationship. But the investigation, which was supported by external lawyers, found no evidence of a material, lasting change in his conduct.

Neal also failed to ensure that whistleblower reports made in November 2023 were properly handled and escalated, which Lloyd's judged a potential governance failure. The Financial Conduct Authority had been informed, the council added.

Lloyd's remuneration committee has told Neal his conduct would have warranted the cancellation of some unvested remuneration. However, he had already forfeited unvested compensation when he resigned last year.

Lloyd's said it had subsequently reviewed and strengthened governance, including imposing a "duty of candour" on the CEO. It is also updating its code of conduct to include guidelines around social media use and personal relationships at work. 

(Reporting by Kirstin Ridley; Editing by Louise Heavens, Emelia Sithole-Matarise and Alexander Smith)