By Jessica Tasman-Jones, FT Ignites Europe, 22 March 2023:
The resignation of Scottish Mortgage’s chairwoman will not be enough to settle shareholder concerns about the governance of the Baillie Gifford investment trust, analysts say.
Fiona McBain will resign from her role following the 2023 annual general meeting and will step down from the board at the end of the year. She will be replaced as chair by senior independent director Justin Dowley.
Ms McBain’s resignation follows a boardroom disagreement with non-executive director Amar Bhidé, who raised concerns about the recruitment process for two new directors, the independence of the chairwoman and elements of the portfolio’s unlisted companies.
Last week Mr Bhidé told Ignites Europe that the board wanted him to resign, but he refused. Yesterday Scottish Mortgage said he “has now left the board and is no longer a director of the company”.
Investment trust analysts say the board needs to regain investor confidence.
“The public nature of the recent dispute may have led some shareholders to question the board’s composition and the efficacy of its governance,” Winterflood analysts said in a note on Tuesday morning.
The board should address the lack of directors with professional investment experience, says James Carthew, head of investment companies at QuotedData.
“We do think that it is important that Scottish Mortgage, as the largest fund in the sector, should have exemplary corporate governance standards,” says Mr Carthew.
Scottish Mortgage says it is “well advanced” in a recruitment process, using an external search firm “with a view to further board refreshment”.
However, Mr Carthew says the board may need to rethink this recruitment process given the boardroom row appears to stem from problems Mr Bhidé identified with the short list of candidates.
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