Jim Armitage: Schroders must tread with care when the time comes for its next generation
Outlook First Standard Chartered, then Experian, and now Sainsbury’s. It’s shaping up to be a year of boardroom upheaval, and it’s still only January. Who next? Well, a little bird tells me Schroders’ veteran chief executive Michael Dobson has sounded out confidants in the City about the idea of him becoming chairman of this granddaddy of fund managers, succeeding 69-year-old Andrew Beeson.
This would be an extremely bold (for which read, bad) step for the board to take. Having your chief executive go up to become chairman is a big no-no in corporate governance terms. The thinking is that the chairman is meant to be an impartial check on the executive board – a chap (and it almost always is a chap) with the resilience and independence to give the boss a slap once in a while when ego, or bad judgement, threatens the interests of shareholders.
In Schroders’ case, this theory applies more than in most corners of the FTSE 100. Mr Dobson has been running the shop, rather well, since 2001. That makes him far from impartial. Schroders is not like most FTSE companies. It’s still 40-odd per cent owned by the family (no bad thing, that). Bruno Schroder, 81-year-old great-great-grandson of the founder still sits on the board, while family member Philip Mallinckrodt is a main board director, heading up the wealth management arm.
Such family involvement, and major league share ownership by directors, should, and does, create a welcome spirit of long-termism. But it also makes it more important to have a truly independent chairman to represent the interests of those shareholders not in the family fold.
However, in the case of Schroders, the problem’s more than just that. Politicians and small shareholders repeatedly urge fund managers to become more engaged in forcing companies in which they invest to have good corporate governance. If one of the biggest fund managers in the country flouted the most basic of rules, it would tarnish the whole industry.
I should point out that the company denies any such changes are afoot, and that Messrs Dobson and Beeson ain’t going anywhere for years to come. Let’s hold them to that.
- 1 President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
- 3 Sir Winston Churchill’s family begged him not to convert to Islam, letter reveals
- 4 UK weather: 'Coldest night of the year' tonight as freezing temperatures plummet to -10C
- 5 Game of Thrones is most-pirated TV show of 2014
President of Argentina adopts Jewish godson to 'stop him turning into a werewolf'
Exclusive: Abusers using spyware apps to monitor partners reaches 'epidemic proportions'
Stoke-on-Trent becomes first British city to be classified as 'disaster resilient' by the United Nations
Sir Winston Churchill’s family begged him not to convert to Islam, letter reveals
AirAsia flight QZ8501 missing: Search for plane carrying 162 passengers from Indonesia to Singapore suspended overnight
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Millions of Britons struggling to feed themselves and facing malnourishment
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Nigel Farage: Ukip leader named 'Briton of the year' by The Times
Immigrants make UK racist, says Ukip councillor Trevor Shonk
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...