Scottish Mortgage chair to step down in shake-up

Baillie Gifford’s flagship Scottish Mortgage Investment Trust has
announced that its chair is stepping down just days after a rare public bust-up over corporate governance.

Fiona McBain, who has been chair of the FTSE-listed Scottish Mortgage since 2017 and a director since 2009, will stand down after this year’s annual general meeting, the trust said on Tuesday. She will be succeeded by the company’s senior independent director Justin Dowley.

McBain’s exit comes less than a week after Amar Bhidé, who had been a non-executive director of Scottish Mortgage since 2020, launched a blistering critique of corporate governance at the trust, including how long McBain had been chair.

The UK corporate governance code recommends a nine-year limit for board chairs, from the date of becoming a non-executive. Scottish Mortgage said the board changes were the result of “succession planning” developed over the past 12 months.

Early bets on Tesla, Amazon and Alibaba turned Scottish Mortgage into one of the savviest tech investors of the past decade, powering a period of stellar returns.

However, the downturn in tech stocks has soured its performance just as James Anderson, the driving force behind its investment strategy, departed. The trust’s share price has tumbled more than 30 per cent over the past year.

Scottish Mortgage said on Tuesday that Bhidé “has now left the board and is no longer a director of the company”. Bhidé told the Financial Times last week that he had been asked to resign following what he said was a disagreement over the appointment of new board members.

Bhidé, a professor of business at Tufts University in Massachusetts, said last week that there were disagreements about the criteria for new board directors and claimed that McBain was “long past the point at which she had any independence”. 

As the dispute became public, McBain said last week that she had “complete confidence” that the Scottish Mortgage board provided “robust governance and oversight”.

Dowley said on Tuesday: “I would also like to thank Fiona for her 14 years of loyal and exceptional service to the company, in particular over the last few years (and at the request of her fellow directors) providing essential continuity, reassurance and leadership during the extraordinary circumstances of Covid-19.”

As part of the overhaul, Professor Paola Subacchi, will also retire from
Scottish Mortgage’s board following the AGM, after serving nine years.