UK - Pension funds have huge and unrealised potential to influence the corporate governance of the companies they invest in, Hermes Equity Ownership Services chief executive Colin Melvin claims.
Melvin explained: "The problem with this is that investment managers are not competent or interested in these conversations largely because of the mandates they are given.
"One option a pension fund has is to have these conversations directly with the company."
Hermes is set to publish recommendations into how confidence and trust can be restored in the financial system and how businesses can rebuild a stable platform in the current financial crisis later this month.
This comes as the government has launched a review to recommend measures to improve the corporate governance of UK banks.
It will be chaired by David Walker - the former UK financial services regulator.
The UK Treasury said the review would examine board management of risk, incentives to manage risk in bank remuneration policies, the competences needed on bank boards, board practices and structures and the role played by institutional shareholders.
It will give preliminary conclusions to ministers in the autumn and final recommendations by the end of the year.
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