HM Treasury has published a speech by the Financial Services Secretary, Lord Myners, which is entitled, Check against delivery. In this speech Lord Myners discusses corporate governance and institutional shareholder engagement.
Lord Myners’ speech is set out under the following headings:
- Importance of governance. Lord Myners states that there have been significant shortcomings on governance and engagement and that these have cost investors and savers dearly. He also calls on shareholders to meet their responsibilities as owners and to live up to their fiduciary obligations.
- Remuneration. According to Lord Myners one of the iconic failures of governance has been executive remuneration. Lord Myners believes that institutional investors, on behalf of their clients, need to challenge executive remuneration more vigorously.
- Underwriting. Lord Myners states that equity underwriting is another area where institutional investors and their clients might benefit from greater engagement. One area where investors could take the lead is underwriting fees. Lord Myners suggests that an industry led review, with a published report would represent compelling evidence of fund managers and their clients taking the initiative to represent the voice of the investor.
- Government action. Lord Myners confirms that work will be undertaken this year to implement the reforms set out in the final recommendations of the Walker Review. He also notes that the code published by the Institutional Shareholders' Committee provides a very good starting point for the Stewardship Code. He also states that he is keen to further the debate on establishing an independent industry body with a mandate to represent the institutional investor community and raise the profile of governance and engagement as an investment strategy.
View Speech by Financial Services Secretary - Check against delivery, 9 February 2010