Making the announcement today at the National Association of Pension Funds’ Annual Investment Conference in Edinburgh Guy Jubb, Head of Corporate Governance, Standard Life Investments said that Standard Life Investments had always had a constructive dialogue with listed companies and other corporate governance initiatives.
“As a major investment house controlling around 2% of the UK stock market, we have been active on UK corporate governance issues for over ten years,” he said. “Changes in the international landscape are now encouraging us to widen our approach. Pension fund deficits have sharpened attitudes to activism. As a consequence, investment mandates are shifting away from relative performance to absolute performance and away from balanced mandates to specialist mandates. Also, the liberation of global capital flows has caused governance gurus to look beyond their national boundaries. These two developments have particular relevance for activism, especially in a global context. It exposed those economies, notably Japan and Europe, where shareholders have been inactive. The returns on capital in these economies have been abysmal – not least because nobody in the governance chain was actively seeking improvements. As fund managers, we must take a similar activism approach for, say, Pacific Basin and North American portfolios as we do for our UK portfolios. Only by demonstrating that we have the capability to take an active stance on a global basis will we be able to win specialist investment mandates and enhance the value of clients’ investments. I am therefore pleased to announce today that Standard Life Investments is this year launching a Global Corporate Governance Platform, which will involve our portfolio managers, not just in Edinburgh but in Hong Kong, Boston and Montreal. We are building activism and governance into our global investment processes. Regional Governance Co-ordinators have been appointed to provide local scrutiny and insights. Our global governance principles provide a strong foundation. They will ensure a consistent, principled approach is progressively applied to all our clients’ portfolios throughout the world. We shall be raising our global game. The trend towards specialist mandates makes this a win-win proposition.”