Alliance Trust’s chairman Karin Forseke is to step down in a month’s time following this year’s bruising battle with activist shareholder Elliott Advisors which prompted a radical overhaul of the trust’s structure.
Senior independent director Alastair Kerr, who joined the board shortly after Ms Forseke in 2012, is also to quit on January 1, several months earlier than planned.
In April Ms Forseke was forced into a dramatic climbdown on the eve of the annual meeting, welcoming two Elliott nominees onto the board after campaigning against them in a six-week war of words.
She promised a strategic review and in September the board announced Mr Kerr’s departure and the arrival of Chris Samuel, former chief executive of Glasgow’s Ignis Asset Management, and Karl Sternberg, co-founder of Oxford Investment Partners, onto the board.
On October 1 Ms Forseke unveiled a shake-up which will abandon Alliance’s historic structure and scrap the post of chief executive held by one of Scottish finance’s highest-profile figures Katherine Garrett-Cox.
The board will early next year become wholly non-executive, and Ms Garrett-Cox will run the Alliance Trust Investments subsidiary with a brief to maintain the performance of the £2.7billion trust itself or face competition for the mandate.
The board promised to reduce its costs by £6m a year, or over 20 per cent, and said that would bring lower charges for investors. It also targeted a narrower discount for the shares, which have persistently traded at a wider discount than most direct rivals.
“The company is reorganising its governance structure to create a wholly independent board and Karin believes that, as this process nears completion, it is the appropriate time for her to step down,” Alliance said.
Ms Forseke is a former investment bank chief executive who was on the board of the Financial Services Authority from 2004 to 2012, spending the final 13 months as vice-chair of the regulator.
Alliance’s interim chairman will be Gregor Stewart, the former Scottish Widows finance director, who joined the board last December.
Mr Kerr, a former chief executive of Virgin Retail Europe and MD at Kwik-Fit, was chair of the remuneration committee and had been given a bumpy ride by critics of Ms Garrett-Cox’s rewards. He is also to step down on January 1 rather than in May.
Alliance said: “Karl Sternberg will then assume the role of senior independent director and will lead the search for an external candidate to take up the position of chair of the trust.”
Last month Ms Forseke said ATI would be given a target of outperforming he MSCI world index by at least one per cent, or “a full review will be undertaken and external managers considered”.
So far this year Alliance Trust has outperformed its chief rivals, returning 11.7per cent, against 7.5per cent for the global sector and a 0.5 per cent loss for the all-share index. The discount stands at 10 per cent against 13 per cent a year ago.
Ms Forseke said yesterday: “We are making good progress implementing the changes announced in October to accelerate our long-term strategy and we expect the new governance structure to be in place in early 2016.
“Alongside the new non-executive only board of the trust, excellent independent boards will be in place to oversee the development of Alliance Trust Investments and Alliance Trust Savings. As these changes are implemented, the chair of the trust’s role will change and as a result I believe now is the right time for me to move on.”
Mr Kerr said: “We have set out the strategy for Alliance Trust and I am confident that the new structure will allow it to flourish.
“I had planned to stand down in May 2016, but I feel that the new team should be responsible for identifying Karin’s successor, and standing down at this time will ensure a smooth transition.
“I would like to thank Karin for her hard work and dedication during her time as chair. While it has been a challenging period, the trust has generated a total shareholder return of 51per cent, well ahead of the MSCI All Country World Index total return of 43.4per cent.
“The trust has undergone significant change under her leadership and is well-placed to continue to deliver returns for all its shareholders.”
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