The Financial Reporting Council’s 'engagement' programme comes under severe scrutiny in this month’s issue of The Private Investor.
Writing as trustee of a major pension fund, UKSA member, John Hunter exposes why the institutional shareholder 'stewardship' that the FRC is promoting won’t work: it overlooks the way in which the financial services industry operates.
UKSA works with the FRC to improve corporate governance and values the dialogue we have, but, as John writes:
The FRC ... is open to charges of being a poodle of the [financial services] industry unless it draws attention to the conflicts of interest that threaten any initiatives based on voluntary codes.
John, like many UKSA members, is sceptical that a regulator like the FRC can change the behaviour of corporate investment intermediaries. He continues:
If we are to obtain rights for private shareholders, we have to challenge the presumption that institutional shareholders are reliable owners and insist that private shareholders are seen as part of the solution.
