by : Danyelle Guyatt
This summary report is based on the full report prepared for the Marathon Club, University of Bath, September 2005
This report summarises the results of a survey into ‘Investment beliefs relating to
good corporate governance and responsibility’, which was carried out amongst 180
people associated with the members of the Marathon Club.
The survey sought participants’ views about the role and responsibilities of the
institutional investment management community, as well as their views on the
promotion of good corporate governance, corporate responsibility and integration into
the investment management process.
The survey found that 83% of senior investment professionals support the promotion
of good corporate governance (CG) and corporate responsibility (CR) in investee
companies, although, as the findings showed, there is considerable potential to
improve how such a strategy could be pursued.
The key highlights of the survey included:
• Portfolio performance will improve if the investment horizon is
lengthened. Over 30% of respondents believe that the most important way to
improve corporate behaviour, performance and ultimately portfolio
performance is to lengthen the investment horizon. The next most important
factors were: better integration of extra financial information [26%], terms (or
duration?) of engagement [16%], collaboration [15%] and withstanding shortterm
market trends/cycles [12%].
• Good corporate governance and responsibility add value. There was a
strong belief that the promotion of good CG and CR is an opportunity rather
than an obligation. Over 88% [CG] and 80% [CR] of respondents agreed that
these policies would help to manage a fund’s investment risks and long-term
return prospects more effectively.
• Integrating CG and CR into the core investment process is important. The
survey revealed a strong desire to integrate CG and CR factors into buy/sell
decisions and core investment processes, with 90% support for CG and 80%
for CR. There was significantly less support amongst respondents for using a
specialist index [50%] or screening/divestment .
• Over-emphasis on returns relative to an index impedes CG and CR
implementation. Despite the generally strong support for CG and CR,
opinions were divided as to whether or not these factors should be integrated
into the way that fund managers are selected and reviewed, with excess returns
to an index being the preferred performance metric. Only 50% of ...... (baca_selengkapnya )