The chairman of the Witan Investment Trust, Harry Henderson, will leave the trust in good shape when he steps down in 2020 from the closed-ended fund founded by his family.
Henderson was appointed a director in 1988, meaning his tenure will be 32 years by the time he steps down at the annual general meeting in two years’ time, a move revealed in a regulatory filing on Wednesday morning. His tenure could be one of the last spanning several decades as investment trusts professionalise in line with changes to the UK Corporate Governance code.
He became chairman in March 2003.
A Witan spokesperson said it will be easier to conduct a thorough search for a replacement having made an announcement. A board committee, led by Tony Watson, will commence the search for a chairman designate, who will be appointed to the board during 2019 and will become chairman following Henderson’s departure.
The eight-strong board currently only has one female director, Suzy Neubert.
Shift to multi-manager structure
Ryan Hughes, head of active portfolios at AJ Bell, said Henderson oversaw “a strong period of performance, outperforming peers and global markets”.
The trust, which launched in 1909 to manage the Henderson family estate, has outperformed the IT Global sector over a five-year period, with returns of 80.9% versus 77.7%. However, over a one-year and three-year period, it underperformed with returns of 0.4% and 42.9%, versus 4.4% and 54.6%. It has £1,903.72m in assets and an ongoing charges figure of 0.76%.
Hughes said: “The move to a multi-manager structure, which he oversaw, was a bold step but one that has turned out to be exactly right given the returns made for shareholders over that last 15 years.
“As ever, long-standing roles like this come to an end but when he steps down in 2020 he will be able to look back knowing he has left the trust in good shape.”
Danger of long-tenured boards becoming ‘cosy clubs’
Hughes explained that the balance right between experienced directors and bringing on fresh talent is difficult, because boards should be able to think and act for the long term while also ensuring they don’t become stale.
“The long-term changes made to Witan’s structure many years ago are an example of the benefit of taking a long-term approach but it is also clear that good governance is firmly in the sights of the FCA with its asset management review,” Hughes said.
“It’s also vitally important to ensure that boards have relevant experience that is recent enough to reflect the current market as for too long investment trust boards have been a cosy club of a relatively small numbers of individuals who have moved between trusts or sit on multiple boards for many years.”
The Association of Investment Companies does not have data on the longest serving investment trust board members.
However, communications director Annabel Brodie-Smith said boards should aim to have a balance of skills, experience, length of service and knowledge of the company under the AIC Code of Corporate Governance.
Brodie-Smith said boards can benefit from directors with tenures longer than nine years.
“Our code states that where a director has served for more than nine years, the board should state its reasons for that director remaining independent in the annual report. Directors who have served for more than nine years should be put forward for annual re-election,” she said.
