Scottish Mortgage Investment Trust chair quits after boardroom bust-up
The chair of the Scottish Mortgage Investment Trust has stepped down today after a public bust up with one of the firm’s directors over alleged “procedural violations” in its investment practice.
In a statement this morning, the FTSE 100 firm said chair Fiona McBain would step down after six years as chair to be succeeded by senior independent director Justin Dowley.
The changes come as the firm was rocked by allegations of a months-long governance violations from non-exec director Amar Bhide over the weekend.
Bhide has alleged that the firm had engaged in “a long series of procedural violations” that were “brushed aside”, as well as accusing McBain of having lost independence in her role.
He has alleged that McBain was “long past the point at which she had any independence and her role, so far as I can see, is to protect managers from criticism and questioning,” in comments reported by the Times.
Bhide had previously raised concerns to the Financial Times over the weekend that the firm lacked the knowledge for its growing investment in private markets.
A stand-off arose last week in which Bhide refused to step down last week and was urging the board to oust him from his role. In its update today, the firm confirmed that he had now left his position.
The changes came in a wider shake-up, with Professor Patrick Maxwell stepping in to Dowley’s role and senior independent director Professor Paola Subacchi retiring from her role as a director after the firm’s annual general meeting.
The boardroom bust up comes after a turbulent year for the firm as it was caught up in a global sell-off that has rocked tech firms. Shares in the trust have plunged 34 per cent in the past year.
Scottish Mortgage Investment Trust said in a statement that the board had “not been made aware of any procedural violations” and there had been “ample opportunity for board members to air their views and provide constructive challenge.”
“Scottish Mortgage has been investing in private companies for over a decade. Typically we invest in late-stage private businesses,” the firm added.
“Most of them are worth over $2 billion and similar in size to listed companies. Scottish Mortgage takes a proactive approach and regularly updates valuations of private companies in the portfolio.”