Pensions lobby group calls for asset managers and investment consultants to be “enlightened fiduciaries”
Fair Pensions, a charity that promotes responsible investment by pension funds and fund managers, this week launched its report “Protecting our best interests: Rediscovering fiduciary duty” (the Report). In its own words. Fair Pensions is “recognised in the UK as the leading NGO that monitors and engages with the investment industry”.
The Report’s principal thesis is that the concept of fiduciary duty in the investment management industry does not comprise the traditional duties of loyalty (acting in good faith, acting in good faith and impartially, and avoiding conflicts) and prudence (acting with with due care, skill and diligence), but rather relies on a narrower interpretation of fiduciary duty where the overriding and (the Report suggests, exclusive) obligation is to maximise financial returns.
The Report argues for a fundamental review of the fiduciary obligations of investors and the rediscovery of basic fiduciary principles, “to move on from an outdated view of fiduciary obligation as a straitjacket which prevents investors from behaving in an enlightened and ethical way”.
Ed Davey, a minister at the Department of Business, Innovation and Skills, is reported as welcoming the Report, saying that “the Report speaks to a number of policy changes that the government are facing…”, and some of the Report’s themes are similar to those in BIS’s current review of “A Long-term focus for corporate Britain“, which we reference in this post.
Friendly Corporate PSL
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