Katherine Garrett-Cox is stepping down from the board of Alliance Trust, as the investment trust overhauls its structure and strategy in an effort to end its underperformance, after a bruising battle with an activist shareholder last year.
Garrett-Cox is not actually leaving the Dundee-based company – she’ll become chief executive of Alliance’s investment arm after the group’s board becomes ‘fully independent’, with only non-executive directors. Nonetheless, it marks a climb down after she initially managed to fight off activist hedge fund Elliott Partners, although it did get two out of its three desired board directors appointed in April.
Six months later, it’s clear there’s still enough concern about the 127-year-old trust’s performance to warrant a full shake-up. As well as the new independent board, Alliance is cutting costs and getting rid of its fixed income, mineral and property assets to focus on equities.
These will stay managed internally, but performance will now be benchmarked against the MSCI All Country World Index. A ‘management engagement committee’, headed by new senior independent director Karl Sternberg, will have a mandate to order a full review and consider appointing external investment managers if Alliance ‘does not consistently deliver against the new benchmark.’
‘At our Interim Results in July, I acknowledged that the first half of 2015 had been a particularly challenging period for Alliance Trust,’ Alliance Trust chairman Karin Forseke said. ‘In the run up to our AGM, many of our shareholders indicated that they sought change.
‘We have carefully considered the feedback we received and this is reflected in this announcement,’ she continued. ‘The actions announced today, taken together, represent some of the biggest changes in our history and are designed to further improve shareholder value.’
Garrett-Cox, who has been chief executive for seven years, now has to turn around the FTSE 250 company’s investment performance is she’s to stay in a job at all. Meanwhile, it’s more than a bit embarrassing for Veuve Cliquot, which named Garrett-Cox businesswoman of the year in May (full disclosure: editor Matthew Gwyther is a judge). That’s after Harriet Green won the gong in 2014, before being ousted from Thomas Cook at the end of that year.
The ‘curse of Veuve Cliquot’ strikes again then. But, after all, what is business without failures and setbacks? Commerce can be cruel – for men and women alike.