Helena Morrissey resigns as chair of AJ Bell after FCA blocked founder’s board role
AJ Bell Chair Baroness Helena Morrissey has resigned from the fund platform following a disagreement with the Financial Conduct Authority over the future role of company founder Andy Bell.
Bell, 56, who built the business into one of the UK’s largest fund supermarkets, announced plans in June to step down as chief executive and become non-executive vice-chairman.
However, the company said on Tuesday that the FCA had objected to the agreement, citing a “risk to effective board governance that would arise if a founding CEO remained on the board with a significant stake after stepping down as CEO.” is”.
Morrissey, a well-known city executive who founded the 30% Club to push for more balanced board positions, is set to step down after just nine months in office.
“I felt it was the right thing to step aside and let the board draw a line,” she told FT.
The FCA approved the board selection of Michael Summersgill, currently Executive Vice-Chairman, as Bell’s successor. He will assume the top position on October 1st. Bell reserves the right to nominate a non-executive director so long as he remains a significant shareholder; he holds a 23 percent stake.
The controversial reshuffle at the FTSE 250 group underscores the difficulty of changing leadership at founder-run companies and raises doubts about how the FCA will treat entrepreneurs who want to step away from the day-to-day management of regulated companies but want to retain a role in their business.
Morrissey, who left the board of wealth manager St James’s Place after 14 months to join AJ Bell, will remain in office until the board finds a successor.
Bell said he accepts the regulator’s stance. “My focus will be to help build the AJ Bell brand and continue to support AJ Bell’s campaigning and lobbying work on behalf of individual investors and financial advisors. I have full confidence in the Board, Michael and the entire management team,” he said.
The company said: “The FCA has indicated that it believes its position is consistent with previous communications to other regulated entities and does not reflect the suitability and appropriateness of AJ Bell or Andy.”
Other founders have maintained closer ties to regulated entities after leaving the office of CEO. Peter Hargreaves, founder of AJ Bell’s larger competitor Hargreaves Lansdown, became executive director after stepping down as chief executive in 2010 and served on the board for five years. More recently, Sami Dessai, founder of lending company Funding Circle, transitioned from chief executive to non-executive director in January.
The FCA declined to comment.
The troubled succession comes at a difficult time for investment platforms like AJ Bell and Hargreaves Lansdown, as households are cutting back on investments to cope with the cost of living and a downturn in markets has squeezed their assets under management and discouraged trading this year .
https://www.ft.com/content/705df42f-ffad-4e78-afa1-b82f52346477 Helena Morrissey resigns as chair of AJ Bell after FCA blocked founder’s board role