Alliance Trust board is partly to blame for its problems

Outlook

Katherine Garrett-Cox could pocket a £1.4m payoff after leaving Alliance Trust

Katherine Garrett-Cox’s departure from Alliance Trust became inevitable the moment she was ousted as group chief executive. Having left the board, she briefly stayed on as chief executive of the fund management arm, but it speaks volumes that now she’s leaving that job she won’t be replaced.

Don’t feel too sorry for her. Ms Garrett-Cox made millions during her tenure and leaves with a £1.3m pay-off. She will also be able to take her pick of non-executive directorships in the future, if that’s what she wants to do.

But there remains a wider point to be made about the troubles at the trust since American activist investors parked their tanks on its lawn, and drew in a bevy of small savers to serve as infantry on the back of sub-par performance and rising costs.

Ms Garrett-Cox took the blame for that, and some of it is deserved. But she wouldn’t have ascended to the position of group chief executive if she didn’t have something about her in the first place.

All the more so given her gender – and yes, that point is entirely valid. The City remains, primarily, a boy’s club. Ms Garrett-Cox’s success in it stands out because of its rarity.

Why, then, did she fail at Alliance? Perhaps because she was allowed to. There was an entire board around her who failed to recognise the issues that were developing at the trust until the Americans rolled into town and forced it to.

As is so often the case, this wasn’t just a failure by a chief executive, it was also a failure of governance.

That is something the investment trust sector would do well to reflect upon, if it wants to keep those tanks at bay.