Byline: Mike Foster
Institutions need to ensure they have sufficient funds to monitor corporate governance issues, according to the International Corporate Governance Network.The demand forms part of a draft statement on institutional shareholder responsibilities published by the network, which represents the views of pension funds and insurance companies around the world with assets collectively worth $10 trillion ([euro]9.3 trillion).
Chaired by Alastair Ross Goobey, former chief executive of Hermes Pensions Management, the network's supporters include such substantial pension schemes as Associated British Ports Calpers and TIAA-CREF, the US teachers' pension fund.
The draft statement points out that institutions need to preserve and increase shareholder value: "Institutional investors as a class have an equal responsibility to address their own roles as fiduciaries and owners of equity on behalf of savers."
It says that institutions should ensure that trustees have adequate skills and expertise to discharge corporate governance functions.
The cost involved in carrying out such governance is likely to involve the use of third parties, including governance specialists and investment managers. …