Alliance Trust chair’s exit seals Elliott triumph

Activist investor Elliott hammered home its victory over Alliance Trust today as the last of the company’s old guard was swept away in a further shake-up of the 127-year-old group.

Chairman Karin Forseke fell on her sword just two months after her ally and chief executive Katherine Garrett-Cox was demoted from the board of the listed investment trust. Forseke, a former Swedish banking boss, will step down on January 1.

The overhaul means Alliance Trust’s six-man board will have a completely new line-up compared with a year ago, marking a major coup for Elliott, which accused the company of lax corporate governance when it mounted a raid on the firm last year. Forseke told Alliance of her decision at a scheduled board meeting yesterday.

“It doesn’t come as a huge surprise,” Numis analyst Charles Cade said. “What was a surprise was that it didn’t happen just after [Elliott won two board seats]. There was a substantial U-turn by the chairman and there could have been a knee-jerk reaction.”

The exit is the final chapter in a saga at the Scottish funds group, which saw Elliott grab two board seats in April after a six-week campaign. Garrett-Cox subsequently left the board in October to run its external fund manager. Many had accused Forseke of being too close to Garrett-Cox. She was appointed in 2012 and oversaw most of the firm’s sluggish performance over the next three years.

“She’s left a trust different to the one she inherited. She has been part of the change, although she had to be brought along kicking and screaming. But she’s left with dignity,” an Alliance Trust shareholder said.

The company’s new senior independent director Karl Sternberg will take up his role earlier than planned to help find Forseke’s successor ahead of the board’s annual meeting in May.

The former Deutsche Bank fund manager will step up on January 1 to replace exiting SID Alastair Kerr. Headhunters at Russell Reynolds have been appointed to help find candidates for the chairman’s role.

“We expect the new governance structure to be in place in early 2016…As these changes are implemented, the chair of the trust’s role will change and as a result I believe now is the right time for me to move on,” Forseke said.

Her departure is a major blow to equality campaigners pushing for more female representation in FTSE boardrooms. As chair of a FTSE 250 board, Forseke was one of just eight women to chair a group in the index.