City fund managers have accused Schroders of compromising its ability to hold companies to account on governance issues by appointing its former chief executive as chairman. Schroders, which was founded in 1804, is one of the UK’s biggest shareholders, with stakes in companies including GlaxoSmithKline, Shell and Lloyds Banking Group. In March it announced that Michael Dobson was relinquishing his post as long-serving chief executive but staying on as chairman in a move that contravened UK corporate governance guidelines. Rival fund managers have warned that his appointment hinders the FTSE 100 investment house from policing governance failures at the companies it invests in. A senior executive at a rival fund company called the move “irresponsible and hypocritical”. “How can Schroders expect the companies it invests in to adhere to guidelines if it doesn’t?” he said. Luke Hildyard, policy lead on corporate governance at the influential Pensions and Lifetime Savings Association, said Schroders could still use its votes at annual general meetings to sanction companies that did not comply with the corporate governance code.