New governance code to put pressure on fund managers

The International Corporate Governance Network (ICGN) is set to call on fund managers to improve their governance standards.

New corporate governance guidelines designed to prompt changes to investment mandates will be rolled out by the organisation from December, the Financial Times reports.

Described by the newspaper as "potentially groundbreaking", the new code has been in development for two years and will attempt to bring the interests of asset owners and fund managers into alignment.

Carl Rosen, executive director of the ICGN, told the publication that the guidelines were inspired by a "surge in enthusiasm for improved governance standards", as well as concerns that many stakeholders exert little influence over the direction of their companies.

Based in London, the ICGN is a not-for-profit membership body that represents many of the world's largest pension funds. Its institutional investors control assets worth a combined $18 trillion (£11.2 trillion).

In October last year, the organisation published new guidelines on corporate risk oversight based on lessons learnt from the global financial crisis.