05 October 2009 - Post by:Däna Burstow
Reading the recent press coverage about the removal of the chairman of the EMI pension trustee board reminded me of a case I’d had. The trustees were having a think about their governance structure generally. That group of trustees operated with the role of chair being passed around the board each meeting – quite an unusual arrangement. They wanted to change it to have a fixed person having the role and asked me whether that was possible.
For a role as important as this, it’s surprising that the answer to the question of who appoints and removes the chairman is often not in the main scheme documents (trust deed and rules). But it is something that trustees should know. So where to look? In the case of a corporate trustee it is to be found in a document that trustees often won’t have to hand – and certainly not one the members will be familiar with – the articles of association of trustee company. If there are individual trustees (rather than a corporate trustee) the answer may be hidden in previous trustee minutes or standing procedures. It is also something that can’t be guessed – all kinds of different arrangements are out there, usually with historic reasons for them.
In the case I had the answer was that the trustee board itself had full control over the selection of its chairman. It did not need to consult the employer. This came as a pleasant surprise to my clients…
Däna Burstow is a partner at Allen & Overy LLP.