267694 EdinburghIT AR 2024 WEB - Flipbook - Page 41
THE EDINBURGH INVESTMENT TRUST PLC / GOVERNANCE / 39
AUDIT INFORMATION
The Nomination Committee
The Directors confirm that, so far as they are aware, there
is no relevant audit information of which the Company’s
auditor is unaware and each Director has taken steps
that he or she ought to have taken as a director to make
himself/herself aware of any relevant audit information
and to establish that the Company’s auditor is aware of
that information. This confirmation is given and should be
interpreted in accordance with the provisions of section 418
of the Companies Act 2006.
All Directors are members of the Nomination Committee
which is chaired by Elisabeth Stheeman. The Committee
meets at least annually to review the composition of the
Board and its committees and evaluate whether they have the
appropriate balance of skills, experience, independence, and
knowledge of the Company and make recommendations to
the Board for the re-election of directors at AGMs. Additional
meetings are arranged as necessary.
THE COMMITTEES
The Board has three committees: the Audit Committee, the
Management Engagement Committee, and the Nomination
Committee. Each committee has written terms of reference,
which clearly define each committee’s responsibilities
and duties. The terms of reference of each committee are
available for inspection at the AGM, at the registered office of
the Company and also available on the Company’s website.
The Audit Committee
The composition and activities of the Audit Committee are
summarised in the Audit Committee Report on page 34,
which is included in this Directors’ Report by reference.
The Management Engagement Committee
The Management Engagement Committee comprises
all directors and is chaired by Patrick Edwardson. The
Committee meets at least annually to review the investment
management agreement and to review the services provided
by the Manager and other key service providers. Additional
meetings are arranged as necessary.
The Committee carries out a thorough review of the
performance of the Manager including key metrics such as
overall investment performance, investment process, risk
management, individual stock performance, team resources,
notice period, the Managers fees level, marketing strategy
and relative fees.
During the year the Committee met twice to review and
consider the performance and continued appointment of the
Manager and other key service providers. The Committee
scrutinised both the Manager’s fee rate and all admin fees
in comparison with similar income-generating UK equity
products, in both the closed and open-ended sectors. A
detailed analysis of the Manager’s fee was performed during
the year and following successful discussions with Liontrust
the Board agreed a new lower fee scale.
This year sees the introduction of the Financial Conduct
Authority’s Consumer Duty regulation, which seeks to
improve the quality of products and services to retail
investors. Whilst the Company is not directly within the
scope of the regulation, the Manager is through its roles as
AIFM and distributor. The Committee has routinely liaised
with the Manager during the year on its preparedness and
developments with regards to consumer outcomes that
cover products and services, price and value, consumer
understanding, and consumer support, and will continue to
do so into the future.
The Committee is also responsible for succession planning
and identifying and nominating to the Board suitable
candidates, taking into consideration the balance of skills,
knowledge, experience and independence of the Board and
having regard for the benefits of diversity and the ability of
any new director to devote sufficient time to the Company to
carry out his or her duties effectively. See page 37 for Board’s
statement on ethnic and gender diversity.
No Director has a contract of employment with the Company.
Directors’ terms and conditions of appointment are set out
in letters of appointment which are available for inspection
at the registered office of the Company and will also be
available at the AGM. A Director can be removed from office
without notice or compensation upon being served with a
written notice signed by all the other Directors.
APPOINTMENT, RE-ELECTION AND TENURE
New Directors are appointed by the Board following
recommendation by the Nominations Committee. The
Articles of Association require that a Director shall be subject
to election at the first AGM after their appointment and
re-election at least every three years thereafter. However, in
accordance with the UK Code of Corporate Governance, the
Board has resolved that all Directors shall stand for annual
re-election at the AGM.
On being appointed to the Board, Directors are fully briefed
as to their responsibilities and are continually updated
throughout their term in office on industry and regulatory
matters. The Company Secretary and the Board have
formulated a programme of induction training for newly
appointed Directors. They have also put arrangements in
place to address ongoing training requirements of Directors
which include briefings from the Company Secretary and
the Company’s auditors which ensure that Directors are well
briefed on new legislation and the changing risk environment.
The Board has noted the implication of the provisions in the
UK Corporate Governance Code that non-executive directors
who have served for more than nine years should be presumed
not to be independent. The AIC does not believe that this
presumption is appropriate for investment companies and
therefore does not recommend that long-serving directors
be prevented from forming part of the independent majority
of an investment trust board. It is the Board’s policy that
all Directors, including the Chair, shall normally have tenure
limited to nine years from their first appointment to the
Board, except that the Board may determine otherwise if it is
