The Investment Management Association (IMA) has published its response to the Walker Review, which looks at the future of corporate governance in the financial services industry and proposes measures to improve the quality of bank boards.
Commenting, Liz Murrall, Director of Corporate Governance at the IMA, said:
"The IMA supports Sir David Walker's Review and many of its recommendations aimed at improving corporate governance in response to the financial crisis. We welcome the review ruling out legislative proposals and not adopting a rules-based approach.
However, we have concerns about proposals that the FSA should encourage fund managers' commitment to the Principles of Stewardship ‘as a matter of best practice'.
Undoubtedly, managers have an important role to play in ensuring good governance and need to be more effective in the future. But they do not run companies. They do not set strategy. Nor are they insiders - in that they only have access to information that is available to the market as a whole.
We think that proposals that address systemic issues, such as risk and remuneration, in banks and other major financial institutions should be implemented by way of FSA guidance rather than via the Combined Code as is suggested. The Combined Code applies to all listed companies - not all financial institutions that pose systemic risks are listed, and many listed companies do not give rise to systemic issues."
Sir David Walker is expected to publish his final recommendations at the end of November.
IMA's full response can be viewed here
Commenting, Liz Murrall, Director of Corporate Governance at the IMA, said:
"The IMA supports Sir David Walker's Review and many of its recommendations aimed at improving corporate governance in response to the financial crisis. We welcome the review ruling out legislative proposals and not adopting a rules-based approach.
However, we have concerns about proposals that the FSA should encourage fund managers' commitment to the Principles of Stewardship ‘as a matter of best practice'.
Undoubtedly, managers have an important role to play in ensuring good governance and need to be more effective in the future. But they do not run companies. They do not set strategy. Nor are they insiders - in that they only have access to information that is available to the market as a whole.
We think that proposals that address systemic issues, such as risk and remuneration, in banks and other major financial institutions should be implemented by way of FSA guidance rather than via the Combined Code as is suggested. The Combined Code applies to all listed companies - not all financial institutions that pose systemic risks are listed, and many listed companies do not give rise to systemic issues."
Sir David Walker is expected to publish his final recommendations at the end of November.
IMA's full response can be viewed here
No comments:
Post a Comment