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Scottish Mortgage chair steps down as rebel director promises to reveal board ‘violations’

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BY GAVIN LUMSDEN, Citywire Investment Trust Insider, 21 Mar 2023:

Fiona McBain, the chair of Scottish Mortgage Trust (SMT), and Amar Bhidé, the rebel non-executive, are both departing as the Baillie Gifford flagship’s board undergoes wholesale changes.

McBain, the former Scottish Friendly chief executive who has served as a non-executive director at the trust for 14 years (in contravention of sector guidelines for a maximum of nine), will step down after the Scottish Mortgage annual general meeting in June.

She will be replaced by Justin Dowley, the company’s senior independent director (SID), a former Merrill Lynch investment banker who joined the board in 2015.

Professor Paola Subacchi, an economist and writer, will also step down having served for nine years, meaning the trust will have to replace half its six-strong board.

Professor Patrick Maxwell, a biotechnololgy specialist who joined the board seven years ago, will replace Dowley as SID.

Meanwhile, Professor Bhidé, the former McKinsey management consultant who publicly criticised McBain in an interview with the Financial Times on Friday, has also left the board.

He followed up his campaign to highlight what he believes are inadequacies in the board’s recruitment process and the trust’s approach to private equity investments with further comments to the Times…

Scottish Mortgage said the appointments would require shareholder approval at the AGM and claimed they were part of ‘succession planning which has been developed and supported by all of the directors over the course of the last 12 months’…

James Carthew, head of investment companies research at QuotedData, said the breakdown of orderly succession planning at the £9bn trust was ‘highly unfortunate’.

He said: ‘The new directors will need to address the rump board’s lack of diversity and also, I feel, the issues raised by Professor Bhidé about the lack of directors with professional investment experience.

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