Investigation into non-executive director’s conduct

The following note from Professor Sir David Eastwood, Chair of the USS Trustee Board, was sent to heads of participating institutions today (Friday 11 October 2019).


I am writing to inform you that the USS Trustee Board (the “Board”) has taken the decision to terminate Professor Jane Hutton’s position as a non-executive member of the Board.

A thorough and independent external investigation conducted by leading law firm Slaughter and May identified breaches of her duties as a director under company law and contract. As a result, the Board has unanimously concluded this is the best course of action in the interests of the scheme as a whole.

Following its investigation, Slaughter and May made recommendations, some of which concerned potential improvements to policies and procedures. The Board is actively considering the recommendations in this regard.

I am writing to you in this way because of the significant public discussion of this issue and so that you are reliably apprised of the facts. As you will understand, the Board considers it important not to allow misinformation to impact adversely on the scheme and its members.


Professor Hutton was appointed to the Board as a UCU-nominated director in 2015. Her term on the Board was due to conclude at the end of this month, and we understand that UCU is currently seeking candidates for this role.

The proper functioning of the Board and its collective decision-making is critical to the governance and success of any pension scheme. Slaughter and May’s independent investigation, and subsequent report, was commissioned in response to concerns raised by directors that Professor Hutton’s conduct – specifically as it pertained to her duties as a director of USSL – was affecting the Board’s ability to function and to perform its duties in the interests of members and beneficiaries.

Given the seriousness of this issue, the Board appointed an independent law firm of high repute with no recent connections to the scheme to lead the investigation with impartiality and rigour and to ensure a fair and proper process was followed.

The Slaughter and May Investigation and Report

Over several months, Slaughter and May conducted interviews with all relevant individuals, including Professor Hutton, and had access to official USS documents and correspondence and, as a result, the final report contains information that is legally privileged and highly sensitive. The Board has been advised, therefore, that it has a duty to the individuals and organisations involved (notably Professor Hutton) in respect of the confidentiality of the information. Accordingly, all directors of the Trustee were asked expressly to agree to confidentiality restrictions before they were permitted to see the report prepared by Slaughter and May.

All USS directors had the opportunity to access the full report on the same terms – both in draft and final forms. These opportunities were, however, declined by Professor Hutton, along with the opportunity to suggest changes to the arrangements which would make them more convenient and acceptable to her.

A copy of the final report’s Executive Summary was sent to all directors, including Professor Hutton, individually.

Under the relevant policy and procedures, the appointing body – in this case, UCU – is invited to make representations to the Board about the potential removal of a director. UCU were offered, but did not take up, the opportunity to review the report on the same basis as directors. UCU did not make any representations to the Board about the report’s findings.

The outcome

As set out above, the independent investigation into Professor Hutton’s conduct found that she had breached a number of her director’s duties owed under company law and contract.

As you will appreciate, details of the investigation are confidential and we cannot discuss them in further detail.

Professor Hutton’s whistle-blowing allegations

It is important to reaffirm that the independent investigation into Professor Hutton’s conduct as a director is completely separate from the Board’s investigations into the substance of the whistle-blowing allegations made against the Trustee last year.

The Board was made aware of Professor Hutton’s allegations in October 2018 – although we understand they were raised with the Pensions Regulator and Financial Reporting Council in the spring of 2018 and subsequently made public by Professor Hutton.

Once aware of the allegations, the Board commissioned internal investigations in line with USS’s whistle-blowing policy. These investigations, which benefited from extensive review by external experts and third-party legal counsel, commenced before the independent investigation into Professor Hutton’s conduct was commissioned (in May/June 2019) and were concluded before Slaughter and May produced its report. It is the view of the Board that these internal investigations are closed. We have kept the Pensions Regulator informed.

Members and participating institutions should be assured that the Board took Professor Hutton’s concerns very seriously. The Board is strongly of the view that it has given Professor Hutton access to a significant volume of additional information, and that the Trustee’s responses to her many and varied requests for information were extensive, considered, and overall reasonable in the circumstances. The Board’s view on this has been supported by the findings of external experts.

The external experts assisting with the review of the whistle-blowing allegations concluded that no changes needed to be made to the outcome of the 2017 valuation. No material issues have been raised by any of the expert advisers engaged by the Trustee in relation to the 2017 valuation.

The decision to terminate Professor Hutton’s position on the Board was taken on the basis of the findings of the independent, external investigation into Professor Hutton’s behaviour as it pertains to her duties and legal responsibilities as a director.

Professor Sir David Eastwood
Chair of the USS Trustee Board

Article Date: 11 October 2019