The Association of Investment Trust Companies yesterday said new guidance meant trusts' boards would be supervised by an independent chairman.
Until now, the AITC has only insisted that a majority of the directors of an investment trust company are independent. The chairman, who plays a key role in deciding who to pick as a fund manager, will now have to be completely independent of that fund manager.
Michael Hart, the chairman of the AITC, said: "I think the industry accepts that is not suitable for the chairman to be connected to the investment manager."
Investment trusts had come under sharp criticism from the City for allowing employees of a fund manager to sit on the board.
Foreign & Colonial this week said none of its fund managers would be allowed to sit on investment trust boards. The move followed the ousting of the board of the Brazilian Smaller Companies Investment Trust. Mr Hart had been chairman of the trust at the same time as he was chairman of the fund manager, Foreign & Colonial.
Henderson Investors, the biggest investment trust manager, still has employees on the boards of some trusts, as do Fleming, Edinburgh Fund Managers, Baillie Gifford and Invesco.Reuse content