In the clubby old world of uk investment trusts, women rarely received an invitation to join boards of directors. in the past decade the mix of sexes has grown fairer. yet the composition of investment trust boards is still a bit of a mess. finding directors appears to remain a case of rounding up the usual suspects.
Investment trusts, listed closed-end funds, have a long tradition in the city of london. some in this sector, which has 208bn in assets under management, have been quoted for more than a century. traditionally, directors took modest fees for modest duties.
Expect more focus on accountability and board make-up from now on. the drive for diversity initially meant hiring more women directors. even in 2010, two-thirds of investment trust boards were all-male. women accounted for just 8 per cent of directors. by the end of 2019 that had climbed to nearly 28 per cent.
Higher numbers of female investment trust directors have not reduced overboarding, a long-running problem. critics say directors serving on multiple boards face conflicts of interest and may fail to devote enough time to their duties. definitions vary, with five non-executive positions a common maximum, fewer if chairperson positions are included.
In general, boards have a tendency to recruit from a limited roster of female candidates. in a recent report on all quoted businesses, msci noted that 22 per cent of female directors held three or more directorships, nearly twice the percentage of men.
About a tenth of investment trust directors would qualify as having gone overboard on mscis definition, according to investec research. four investment trust directors hold six board seats. these busy folk are jon bridel, josephine dixon, sue inglis and karl sternberg. the latter has five investment trust positions and also sits on the board of jupiter fund management.
Portfolio careerists argue that directorships take less time at investment trusts than conventional companies. they also say directors on private funds face less scrutiny. so what? higher standards are meant to be one of the sectors selling points.
The sector deserves credit for becoming less of a boys club, albeit it is lagging behind the ftse 350, 30 per cent of whose directors are female. as it closes the gap, it needs to embrace a broader definition of plurality: hiring women and men from a wider talent pool.