Knives out for Schroders old boys

A BOARDROOM shakeup at investment giant Schroders is expected following mounting pressure from shareholders. Two long-standing non-executive directors, Sir Ralph Robins and Baron Daniel Janssen, will stand down.

But that will still leave the company - which last year plunged into loss - with six of its nine non-executives over the normal retirement age. Three of them - William Turner, George Mallinckrodt and Alva Way - are more than 70 years old.

As the company was preparing for its annual meeting this week, one shareholder said: 'The Schroders' board structure is appalling. 'Not only is it stuffed with people over the age of 70, but the company continues to persist with a two-tier voting structure that favours the founding family.'

It is now understood that new chief executive Michael Dobson, who has already replaced the company's finance director, will want to make sweeping changes in an attempt to improve the confidence of investors.

Schroders has recently been embarrassed by its own governance failures. It is one of the country's biggest investors with about £110bn under management, and has been attempting to bolster the reputation of its fund managers for corporate governance activism.

Yet the company last year plunged into loss, putting even more strain on its historic reputation as one of the leading investment houses. More clients left the firm than joined, and Schroders ended 2001 with nearly £20bn less under management than it had started with.

Then chairman Peter Sedgwick was controversially given a £1.5m bonus to persuade him to stay beyond normal retirement age. He was also given a £2m contribution to his pension fund.

In addition, Schroders suffered the ignominy of being forced to confess that it had overstated past profits. A spokesman said he was unaware of any hostile comment from shareholders. He added that the performance of Schroders' major funds was beginning to recover and pointed out that David Swensen, a respected figure in the world of US fund management, would be joining the board as a non-executive director.

However, executives in the field of investment management said it was inconceivable that change would not happen quickly at Schroders. 'Clearly Dobson cannot be seen to be pushing people off the board,' said one observer, 'but it's plain that he wants change. I think that rate of change is bound to continue.'