The largest investors in the FTSE 100 are to combine in a new oversight panel on corporate governance, enforcing auditing, management and pay standards.
The creation of the Investor Forum, a key recommendation of John Kay’s report into City short-termism, will be supported by the Investment Management Association, the Association of British Insurers and the National Association of Pension Funds.
The body will off investors, including significant overseas institutions, a common platform to enforce agreed standards of governance and policy failures.
Action groups led by significant investors in individual companies will engage with boards and issue recommendations on action by other shareholders, reported the Financial Times.
The establishment of a single body to represent equity owners was a key plank of professor John Kay’s 2012 report into ways to improve the workings of the UK stock market.
Critics have claimed that too many shareholders have their own agendas however, and that finding common ground on many issues may prove impossible.
Baillie Gifford partner James Anderson, chair of the working group which is to launch the initiative, told the FT: ‘We insist that improvements in the collective engagement process are not a chimera.
‘The Investor Forum will drive cultural change and act as a mechanism for investors to work together more effectively.’