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The Actuary The magazine of the Institute & Faculty of Actuaries

Fund managers are not society’s policeman!

Corporate governance activism – desirable doctrine or damaging dogma? is the title of a new book by actuary Arjuna Sittampalam which challenges what he says is the growing orthodoxy that investing institutions should play an active part in the governance of the firms in which they invest.

‘There are growing signs that activists are going too far and that corporate governance intervention has become a religion, with an addiction to dogma that adherents of all religions are prone to. Undoubtedly, corporate governance activism under the appropriate circumstances has a lot to be said in its favour, but this does not justify its proponents undertaking evangelism. There is a need for the elimination of emotion and for an examination of the underlying principles’, he says.

Although Mr Sittampalam is careful to distinguish between general governance standards such as Higgs and its predecessors and institutional activism in particular cases, his views are nonetheless likely to be controversial in at least some quarters. For more on this book, visit: www.sageandhermes.com/publications/corp-gov-activism/