Report from the Fair Pensions lobby group on encouraging fiduciaries to consider the broader impacts of their investment activities
Fair Pensions, a charity promoting “responsible investment by pension funds and fund managers”, last week published a report titled ”The Enlightened Shareholder: Clarifying investors’ fiduciary duties“. The report aims to persuade fiduciaries – such as investment managers – to consider their fiduciary duty to be something broader than simply maximising short-term financial returns:
“The report suggests that fiduciaries should be empowered to consider the broader impacts of their investment activities on beneficiaries’ future spending power or quality of life, as long as this does not compromise investment performance. “Pension investments do not exist in a vacuum, but are a means to securing a decent retirement,” it argues.
The report sets out detailed proposals for legislative clarification, modelled on directors’ duties under the Companies Act 2006. It suggests that the Act’s attempt to embed ‘enlightened shareholder value’ into UK company law missed a vital piece of the puzzle by not tackling the perception that fiduciary shareholders are legally obliged to be unenlightened.”
The launch of the report was supported by Professor John Kay, who has just published his interim ”Review of UK Equity Markets and Long-Term Decision Making” as we discuss in this post.
See also: The fiduciary duty of investment managers: Is it more than maximising financial returns?
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