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Standard Life says it’s “debatable” Kay Review’s investor forum proposal will work

Leading fund manager cool on investor committee idea

Standard Life Investments has said it is “debatable” whether the proposed investor forum – one of the key ideas of the recent UK government-backed Kay Review – will achieve results.

Noted economist Professor John Kay floated the idea of an investor committee to help boost engagement with companies in his Review of UK Equity Markets and Long-Term Decision Making.

The idea has the backing of trade bodies the Investment Management Association (IMA), which represents fund managers, and the National Association of Pension Funds (NAPF). But the Association of British Insurers is sceptical, as Responsible Investor has reported, fearing it will be will be an irrelevant “talking shop”.

Now Standard Life, one of the leading fund managers in the UK with £163.4bn (euro) under management, has poured further cold water on Kay’s idea, saying: “While there will always be room for improvement, it is debatable whether this particular proposal will achieve the desired results.”The comments come in the firm’s first ever Annual Review of Governance & Stewardship.

Its Global Head of Governance & Stewardship, Guy Jubb, said: “The need for change and improvement in governance and stewardship is beyond dispute.” But he cautioned that only time would tell whether the current raft of changes would result in ‘change for good’.

“It is debatable whether this particular proposal will achieve the desired results”

Business Secretary Vince Cable envisages the forum as “all the people in the investment chain around a table” – though the government will take a hands-off role.

The Kay Review has also taken flak from leading investment academic Professor Gordon Clark of Oxford University, who contends the report is “muddled” in certain key areas.