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Trust feels heat over Shaw
Sunday Herald 6 February 2005
Aberforth Smaller Companies Trust (Ascot) has come under fire from
corporate governance watchdogs because it has appointed a chairman who is
not deemed to be independent under the combined code.
According to proxy voting agency Manifest, the £575 million trust’s new
chairman, David Shaw, does not comply with the independence criteria laid
down in the 2003 Combined Code. This pools earlier versions with the later
Higgs Review and is stronger on directors’ tenure.
Shaw, also chairman of private equity house Bridgepoint Capital, has sat
on Ascot’s board as a non-executive director since October 1994. Yet the
combined code recommends chairmen should be “independent on appointment”
and that any director with a tenure of more than nine years cannot be
considered to be independent.
Shaw is to become Ascot chairman when Bill Hughes, former chairman of
Grampian Holdings, retires at the annual meeting on February 23.
Manifest also highlights that the appointment of Ascot directors is not
considered by a nominations committee – as recommended in the code – but
by its board as a whole.
Manifest’s Karen Talbot said: “They say that they have fully complied with
the AITC (Association of Investment Trust Companies) code but this is much
less stringent than the combined code.”
David Somerlink of Pension & Investment Research Consultants said: “We
said that Shaw was not independent in last year’s report. We agree with
Higgs that there should be an independent chairman. However we do not rate
this particular case as a voting issue.”
Ascot has expressed its confidence in Shaw’s independence, saying his
continuity and experience are an advantage.
In the year to December 2004, Ascot turned in a return of 28.7% versus a
return of 20.7% for the relevant index.
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