EU capital markets union a massive opportunity for stewardship and governance – Standard Life’s Skeoch

Leading investment figure eyes single set of comply-or-explain principles

The European Union’s ambitious ‘Capital Markets Union’ (CMU) plan presents a massive opportunity to boost investor stewardship and harmonise European corporate governance principles, says Standard Life chief Keith Skeoch.

Skeoch, who is stepping up from his role as CEO at £245.9bn (€345bn) asset manager Standard Life Investments to head its parent company, said CMU is a “chance to harmonise disclosure and a chance to harmonise governance. If we can do these two things we can give investors an opportunity to exercise their stewardship obligations”.

Skeoch was speaking at an event on the CMU organized by the UK’s financial watchdog the Financial Reporting Council (FRC), where he is also a director. The event took place at the heart of the City financial district, at the London Stock Exchange.

The plan is “a long-term objective” Skeoch observed, adding: “In a world of long-term talk and short-term action its good to have a debate about that.” He said he hoped to be debating CMU for “decades to come”.

“I want to see a harmonized set of governance principles. Eventually we will iterate one general set of principles based on a comply or explain basis,” he continued.RI reported earlier this month that the EU looked set to support the promotion of ESG (Environment, Social and Governance) investment within the CMU initiative, according to the draft conclusions prepared for it by the Economic and Financial Committee of the European Council.

“I want to see a harmonized set of governance principles.”

Meanwhile, PensionsEurope has called on the EU to take pension funds into account when building the Capital Markets Union. Chair Joanne Segars said the Brussels-based industry body supports the aims of the European Commission but warned that pension funds face a “mismatch” between their long-term investment horizons and a “short-term regulatory focus”.

Elsewhere, the FRC is facing calls from environmental groups including the CDP, Carbon Tracker and the Climate Disclosure Standards Board (CDSB) to ensure that fossil fuel companies are complying in their legal duty to report climate risk.