The world’s most famous investor is amongst a cabal of US asset management heavyweights designing a new set of corporate governance guidelines to lift the focus on long-term goals, the Financial Times reported last week.
According to the FT story, the group of upper-echelon fund managers have held a series of “secret summit meetings” – dating back to last August – to thrash out a corporate governance consensus.
“Jamie Dimon, chief executive of JPMorgan Chase, and Warren Buffett convened the sessions with the heads of BlackRock, Fidelity, Vanguard and Capital Group to work on a new statement of best practice that would cover the relationship between US companies and their investors,” the FT story says.
“The unusual collaboration comes at a time of rising shareholder activism and a raging debate about whether public markets demand short-term profits at the expense of long-term investment.”
The group – including Larry Fink, Abby Johnson and Tim Armour, the respective heads of BlackRock, Fidelity and Capital – last met in December 2015 at the New York headquarters of JP Morgan.
Mark Wiseman, head of the Canada Plan Investment Board (CPIB), and Jeff Ubben of “activist hedge fund”, ValueAct, were also involved in the corporate governance push, according to the FT.
Wiseman was instrumental in the launch of a new long-term index this January at the World Economic Forum in Davos. The CPIB, along with the New Zealand Superannuation Fund and four other major global institutional investors, threw their collective weight behind the S&P Dow Jones ‘Long-term Value Creation Global Index’ (LTVC).
According to the FT, the US fund collective was expected to produce a draft ‘best practice’ corporate governance document later this year.
“Discussions have focused on issues such as the role of board directors, executive compensation, board tenure and shareholder rights,” the FT says.
In August 2015 a group of local institutional investors formed the New Zealand Corporate Governance Forum (NZCGF) to pursue similar aims. As well as the Crown Financial Institutions, Devon Funds Management and Mint Asset Management were also foundation NZCGF members.