A joint statement from the two firms said that the merger had been approved ‘overwhelmingly’ through a vote, with ninety-nine per cent of those balloted voting in favour. It said that the new entity would be the only firm fluent in US law, English law, and ‘the laws of the world’s most dynamic markets’ in equal measure.
Wim Dejonghe, senior partner at Allen & Overy, said: “This is a historic moment for both firms and our profession. We are delighted that our partners have voted so resoundingly in favor of this merger, which is a transformational step for the legal industry.
“We have long admired Shearman & Sterling for its outstanding reputation, talent, and client base, and we are confident that together we will create a truly exceptional global firm that will serve our clients’ needs in an increasingly complex and dynamic world.”
A new site advertising A&O Shearman said that the resulting firm will have nearly four thousand lawyers, including eight hundred partners, in forty-eight offices in twenty-nine countries. It also predicts that combined revenues will reach $3.5bn.
Dejonghe added: “There are significant benefits of this combination for our clients and our people. For Allen & Overy, this supercharges our ability to serve clients in the US market, which has long been a strategic priority, and strengthens the core of our business around the world.”
The firms said that they will now embark on period of active integration planning, while they work together toward final closing of the transaction, which is anticipated in or before May 2024.
Adam Hakki, senior partner at Shearman & Sterling, said: “Our partners have recognized and welcomed this unparalleled opportunity to combine our individual market leadership and brands to serve clients as an integrated global law firm, preeminent in all our markets.
“A&O Shearman will be a firm unlike any other in the world, built to achieve exceptional outcomes for our clients through an intentional focus on quality, excellence, and collaboration. We are creating a new industry leader, with truly global capabilities and we are excited for what is to come.”
Broader pipeline required for captive iNED positions
The Guernsey captive market is working hard to develop a broader pool of suitable candidates for independent non-executive director (iNED) positions.
With captive numbers growing in Guernsey and some opting to appoint numerous iNEDs to a board, there is an ever-greater demand for qualified professionals to fill the positions that are opening up.
The GTA University Centre previously launched a NED Development Programme and is now working with the Guernsey International Insurance Association (GIIA) to organise mentorship opportunities to professionals interested in becoming an iNED on captive boards.
Debating the role and pool of iNEDs on an episode of the Global Captive Podcast, Nick Wild, an iNED on multiple captive boards in Guernsey, said the jurisdiction was fortunate that its proximity to London means it can draw on professional service experts in the United Kingdom.
There is, however, still a need to develop suitable iNED candidates, with Wild highlighting directors can risk spreading themselves a bit thin if they have too many appointments.
“We can pull on a whole pool of people from the UK, for example,” Wild said.
“A massive insurance market, extremely experienced people on the law side, on the accounting side, on the insurance side that we could bring in. More of that is happening, but the level of directorships one can and should have is a matter that’s been under debate for some time.
“The regulators have been looking at it over a period of time, they haven’t actually made any moves as yet.
“I personally think from my own experience that up to 10 is kind of okay. More than 10 is stretching it because if you’re really going to engage in the way that I like to engage on mine, I don’t think you’ve got much room for more than 10.”
Airmic CEO Julia Graham also serves as an iNED on three captive boards in Guernsey.
She said while she agreed that directors need to be cognizant of the number of appointments they take on, she did not think a prescribed number would be the right way forward.
“There’s no blueprint for this and I think the answer is driven by the nature, scale and complexity of the boards that you sit on,” she added.
“I’ve got one board, which is a material investment of my time, there’s no doubt about that.
“I’ve got another board which isn’t and I can’t say that one plus one is two, it’s more like one is five, plus one is six, so I think to some degree it’s always going to be an extension of what you’re doing and what is demanded of you.
“I would be a bit disappointed if a regulator felt they needed to introduce a physical number.”
Peter Child, CEO of SRS Europe, said he understood that not all board positions should be equal, but a maximum number could be introduced.
“Twenty-five for instance,” he said. “We talked earlier about adding genuine value and switching mindset from industry to industry.
“To my mind, there is no way you can add genuine value to that number of boards. You can come in and do a replica job on each board, and you can pick up on the minutes, you can pick up on the financial statements, fabulous.
“But you can’t add to, properly, the culture of the parent, you can’t understand the culture of the parent, you can’t add to the strategy of the captive, you can’t properly understand the risk management strategy. It becomes a bit routine.”
Wild added that a lot has changed for iNEDs and for the broader governance of captives over the past 30 years.
“Certainly the element of corporate governance and regulatory oversight has increased massively over that period and that’s a good thing overall,” said Wild.
“It has meant that the role of the independent non-executive director has become much more focused than it used to be.
“They’re (the regulator) expecting that director to raise with them problems if they arise and are not properly resolved. Now that happens extremely rarely, of course, but it’s an extra onus on the iNED.
“The iNEDs are, in my view, much more engaged and involved than they used to be. They actually want to not just participate in the board meeting, but participate in the business.
“They want to understand why the business is going in that particular direction. They may have suggestions of their own as to how that should develop and I think that should be welcomed.”
Graham said that while a lot has changed over the past 20 years of her experience with captives in the domicile, the role of a captive director should not be viewed as different to that of a director on any board.
“You are there to help govern, you are there to lend your experience and your knowledge, and you’re there to be current and informed,” she said.
“I think that’s true of any director, whatever entity you’re talking about, and it’s never been truer, I think, of captive boards today.”