Alliance Trust spent £3million on its unsuccessful fight with activist Elliott Advisors but is "determined" there will be no repetition of hostilities when the truce expires after 12 months, the chairman has said.

Karin Forseke told a packed meeting of 400 shareholders in Dundee that the last-minute U-turn which saw the trust welcome two of Elliott's nominees onto its board was "not the preferred outcome", whilst admitting that after the activist's move other big investors had given "a strong signal that action is required".

The chairman said there had been "some significant concerns from a large number of shareholders, not on our strategy but on the speed at which we are delivering".

She said the proxy votes on the withdrawn motions to appoint three Elliott-nominated directors had been "a close-run thing", so the board had decided to "look beyond the vote and provide certainty and clarity for the business".

Roger Lawson, director of small shareholder group ShareSoc, told the chairman: "I was horrified by the amount of hot air and questionable allegations by yourselves against Elliott, I thought it was a recipe for running up costs, whereas a more compromised approach would have been more successful in the short-term and of course saved a lot of money - I have to ask whether you are considering resigning over this?"

Ms Forseke said: "I don't believe this referendum was about my chairmanship." On her position and that of chief executive Katherine Garrett-Cox, Ms Forseke said afterwards: "Shareholders sent a very strong message that they absolutely have confidence in us to continue."

Shareholder John Steen said: "There is a whiff of smoke-filled rooms, you have done a deal and it has cost a lot of money, you have brought these people onto the board, what about letting them speak to us?"

Anthony Brooke, one of the new directors currently with observer status, said he had "no knowledge of Alliance Trust except what is in the public domain" but he was "completely independent of Elliott and will express my views and not be influenced by anybody". He added: "I am convinced on the basis of what I have learned in the last three weeks that change is necessary."

Ms Forseke said the directors knew their responsibilities to all shareholders, but she did not repeat her formal statement of the previous day welcoming the new directors and their valuable experience, saying only: "We are going to make this work."

Shareholder John Halley said Alliance had for the past 20 years promised performance over the long-term. "It has underperformed compared to my similar investments - how long is long-term, and will the board seriously consider a change to the investment management of the trust? Because if not I fear that action from the likes of Laxey and Elliott will become a constant and expensive distraction."

Ms Garrett-Cox said before her arrival performance had been poor but it was now above median for the sector, adjusted for risk, while the savings and investment subsidiaries had been relatively small but wer enow growing rapidly. Alliance Trust Investments, she said, had "a wall of money coming towards us" from charities and endowments looking for "responsible" investments.

The meeting heard that ATI was targeting a fivefold increase in funds to £10bn by 2020 and Alliance Trust Savings a sixfold increase to £45bn.

Shareholder John Dick said he was concerned at the "rather fast revolving door" of fund managers and the cost of paying them off, as well as the "high cost of senior management compared to trusts like Scottish Mortgage and F & C".

Alastair Kerr, chairman of the remuneration committee, said Ms Garrett-Cox's £450,000 salary was below the £490,000 median for heads of "comparable businesses".

To a shareholder complaint that £3m could have been saved if a compromise had been agreed earlier, Ms Forseke said: "The cost of defence is high." She added: "We have this time ahead of us to take all the measures to make sure we don't end up in this situation again".

Douglas Wood said there was "mismatch" between the company's stated aims and its performance targets for directors, with 41per cent of bonuses payable when the trust managed to scrape into the top half of its peer group.

In his presentation Mr Kerr said incentive payments had not been made last year in respect of total shareholder return performance, where Alliance was 18th out of 33 trusts, but only on net asset value return, where it was 17th.