Standards

Best practice will "legitimise" institutions' governance demands

New best practice principles designed to improve investment fund governance and curb the abuse of fund assets have been released by a committee of the Stanford Institutional Investors’ Forum.

Announcing the standards, Joseph Grundfest, a committee member and professor of law and business at Stanford Law School, said: “Good governance ensures better organisational performance, reduces the potential for fraud and financial abuse, and legitimises institutional investors’ demands on publicly owned companies to adopt and follow corporate governance standards”.

Among the committee’s recommendations are that funds: clearly define and make publicly available their governance rules; mandate tough and transparent policies to address conflicts of interest; and move to ensure funds have trustees competent in financial and accounting matters.

July 2007