[Legal & General]
Annual Report and Accounts 2010

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Engagement Matters.

YOUR BOARD STRIVES TO ENSURE THAT IT IS IN TOUCH WITH SHAREHOLDER OPINION.

ShareholderS by sector

Shareholders by sector: Mutual Funds 31%; Retail 22%; Insurance 20%; Pensions 18%; Other 9%) (pie chart)

It is of great importance to the Board to ensure that the direction of the Company is aligned with shareholders’ interests. In order for engagement to be effective it is vital for the performance of the Company to be clearly understood by shareholders, as well as other stakeholders, and for the Board to be well informed of shareholder opinion in response. The Board approaches engagement with the Company’s investors as set out below.

INSTITUTIONAL SHAREHOLDERS

Frequent meetings are held with major shareholders; these are attended by a selection of the Group Chief Executive, the Group Chief Financial Officer, the Chairman and members of the Company’s Investor Relations team. The Senior Independent Director ensures that appropriate engagement takes place, and is available to attend meetings where necessary to ensure that he has a balanced understanding of any issues and concerns of major shareholders. Sir David Walker, as the Senior Independent Director, is available to shareholders if they have any concerns that cannot be resolved through the usual channels.

ShareholderS by region

Shareholders by region: UK 78.82%; North America 10.64%; Europe 7.37%; RoW 3.17%) (pie chart)

The Chairman ensures that all Board members have an understanding of views of major shareholders about the Company. The Investor Relations department plays a key role in this process and regularly updates the Board on:

  • significant changes in the share register;
  • details of contact with shareholders and the material matters discussed;
  • broker and analyst feedback on shareholder views;
  • share price movements compared to the market and sector peer group; and
  • any corporate governance issues raised by shareholders.

RETAIL SHAREHOLDERS

The AGM is a key event for the Board. The Board welcomes the opportunity to communicate with its retail investors at the Company’s AGM. Each of the Board directors, including the chairs of all Board committees, attend the AGM and are available to answer any questions. At the 2010 AGM, 62.2% of shareholders voted on the business proposed; we hope to increase this further in 2011 and would encourage all shareholders to vote. Electronic facilities are provided to make this as easy as possible for shareholders; votes can be cast online at www.sharevote.co.uk.

Volume of shares traded

Volume of shares traded from 31 December 2009 to 31 December 2010 (line chart)

ELECTRONIC COMMUNICATION

We are seizing the opportunity to minimise our impact on the environment and to improve the speed and efficacy of our communication with all shareholders. We encourage shareholders to sign up for electronic communication at www.shareview.com. Shareholders who elect electronic communication will receive email notification of the availability of shareholder communications online and will be able to explore a wealth of other information displayed on the Company’s website at the same time. Results presentations are webcast so that all investors can access them simultaneously and slide presentations are also made available on the website.