The Investment Management Association (IMA) says the government's approach to encouraging shareholde...
The Investment Management Association (IMA) says the government's approach to encouraging shareholder activism to improve corporate governance and investor returns is flawed.
This view is expressed in the IMA's response to the Treasury/DWP consultation paper titled: "Encouraging Shareholder Activism".
While there is a recognisable link between accountability and the wish to maximise investor returns, the IMA does not believe legislation is the best way to ensure the latter happens.
The proposals as they stand are too vague and would encourage fund managers to adhere to compliances rather than trying to think outside the box to maximise their achievements, the IMA says.
It also feels that there is an over-reliance on US legislation that is also being taken out of context in its theoretical application to the UK market.
The proposals would also lead to more litigation that would not be in anybody's interests, the IMA concludes.
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