Myners Principles: Review of Progress

In March 2000, the Chancellor of the Exchequer commissioned Paul Myners to conduct a review of institutional investment in the UK. Myners concluded that there were a number of areas where change would result in improved investment decision-making. In his report, which was published in March 2001, he recommended that pension fund trustees voluntarily adopt, on a ‘comply or explain’ basis, a series of principles codifying best practice for investment decision-making.

The Government accepted Myners’ recommendation, as well his further recommendation that it should review after two years the extent to which the principles have been effective in bringing about behavioural change.

The Government has released its review of progress. This has found that, while voluntary action is being taken against the principles, progress is lagging in several key areas. In response, the Government proposes to revise the Myners principles to strengthen and amplify what they say in respect of these problem areas.

The Government is consulting on these proposals. Responses to the consultation are due by 16 March 2005.

The review marks another important step in the Government’s programme of reform to improve the efficiency of the ‘investment chain’ which links savers and the companies in which they invest. The Government’s analysis of and approach to the investment chain was set out in the Pre-Budget Report 2004.

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