© FT Montage/Bloomberg

City grandee Michael Dobson is stepping down as chairman of Schroders, ending a two-decade reign at the helm of the FTSE 100 investment manager that counts the Queen among its clients.

In a note in Schroders’ annual report published on Friday, Mr Dobson said: “During 2020, we will continue to review board composition and succession planning.” He added that independent director Ian King, former chief of BAE Systems, would lead a committee to find his replacement.

A Schroders spokesperson said there is “no set timetable” and said that Mr Dobson remains chairman until a successor is appointed.

Mr Dobson, the former chief executive of Morgan Grenfell merchant bank, held the same role at Schroders for more than 15 years before the family trust that controls the 216-year-old company elevated him to chairman. 

The 2016 appointment was controversial as it flouted best corporate governance guidelines on chief executives becoming chairman. It was particularly notable, said critics, given Schroders’ role as a corporate steward policing the companies in which it invested.

Michael Dobson with Queen Elizabeth as she opens the new Schroders headquarters in the City of London in November 2018
Michael Dobson with Queen Elizabeth as she opens the new Schroders headquarters in the City of London in November 2018 © Reuters

An imposing 6ft 6, Mr Dobson, 67, is at times an aloof individual who has tried to keep a low profile. He has acted as a bridge between the Schroders executive team and the founding family, overseeing the transition to the board last year of Leonie Schroder following the death of her father, patriarch Bruno Schroder who made Mr Dobson his confidant. 

Philip Mallinckrodt, another member of the Schroders family, will quit the board next month and be replaced by his sister, Claire Fitzalan Howard. Just under 48 per cent of the company’s voting shares are owned by the family.

Mr Dobson, who is paid £650,000 a year, is expected to formally hand over the chairmanship no later than next year’s annual general meeting in April 2021. 

Amin Rajan, chief executive of the Create Research consultancy, said: “Schroders was a sleeping giant when [Mr Dobson] became chief executive, which he rebooted by a series of reorganisations and turned into an investment powerhouse.” 

This month Schroders reported a 4 per cent drop in 2019 pre-tax profits to £625m and a record £500bn assets under management. It attracted net investor inflows of £43.4bn last year, a reversal of 2018’s £9.5bn outflows, after securing a £32bn mandate from Scottish Widows.

However, it also featured in a ranking of Europe’s worst-selling fund houses in 2019 after bleeding €6.3bn from its Europe-based mutual funds, its worst outflows in more than a decade.

Schroders is one of the City’s oldest institutions and over its more than two centuries its operations have spanned banking, broking and fund management.

In response to competition from US giants BlackRock and Vanguard, Schroders has shifted into alternatives and wealth management, higher-fee businesses that are less vulnerable to attack from low-cost passive strategies.

Dobson CV

Born May 13 1952

Education MA in modern languages, Trinity College Cambridge

Career

1973-89: Joins Morgan Grenfell, where he rises to become chief executive

1990-2000: Senior role at Deutsche Bank after it buys Morgan Grenfell

2000-01: Founder of Beaumont Capital Management, an asset management business bought by Schroders

2001-16: Chief executive of Schroders

2016-present: Chairman of Schroders

Family Married with two daughters

Interests Plays golf and tennis, enjoys skiing, supports Chelsea football club, where he has a season ticket xx

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