Think tank unveils toolkit for investment trust boards to boost governance oversight

Think tank and advocacy group City Hive has launched a ‘toolkit’ specifically for investment trusts, designed to help bolster boards’ ability to assess and manage their governance levels.

This is the latest move by City Hive to help drive positive practice in the wealth management sector overall, having assembled a dedicated council for the institutional market last month.

Based on the group's pre-existing framework - which has been embedded into the investment processes of a number of fund selectors on its Stewardship Council - the ACT Investment Trust Toolkit explains how boards can best evaluate whether an asset manager's internal culture is aligned with their company's values and duty to investors via a consistent, comparable process.

"Culture is no longer a soft issue - it is a governance and risk consideration, and has become a key lens through which regulators, shareholders and clients assess firms," City Hive said.

Currently, 13 of the 36 ACT Signatory firms manage 54 investment trusts totalling £32.3bn (as at 31 August 2025), including Aberdeen, AXA Investment Managers, Fidelity International, FSSA IM, Invesco, Jupiter, Liontrust, M&G, Premier Miton, River Global, Redwheel, Schroders and Stewart Investors.

Co-CEOs of City Hive, Bev Shah and Mandy Kirby, said that for investment trusts "social value is no longer a ‘nice to have'".

"Governance, transparency, and ESG impact are now integral to investment decisions. Investors - and regulators - expect nothing less. The Financial Conduct Authority's rules, and the revised Corporate Governance Code, make it clear that firms must be open about their culture and how it supports good outcomes."

The UK-listed closed ended space has been under increased pressure in recent years as a plethora of macroeconomic headwinds have seen the majority suffering widening discounts and calls from the City for boards to do more to manage this best for shareholders.

This dynamic has contributed to a rise of activism from many shareholders, mainly grounded in performance but in several scenarios focused on the boards' governance practices, or in some instances, a feeling of failure on that front.

"Investment trusts face a new test," Shah and Kirby argued.

"If they embrace transparency, purpose and cultural change, they can play a vital role in unlocking the UK's future growth and building a fairer, more sustainable financial system. If they do not, they risk being seen as relics of another era."