GERMANY – Professor Wolfgang Gerke, a financial expert who recently unveiled a corporate governance code for asset managers, has called for the code to be embraced by German pension funds.
Gerke unveiled the code, whose adoption is voluntary, last April. According to him, the code is essential in improving investor protection and transparency on capital markets.
Although the code was originally understood to apply to asset managers only, Gerke noted that it was relevant for all capital market players - including pension funds that manage their own assets.
”It’s not that I suspect that there are hidden risks among pension funds. No, the reason why I believe that they should consider it is simply because they are huge market participants,” Gerke told IPE on the margins of the autumn conference for German occupational association aba.
Among other things, Gerke’s code recommends that the supervisory board for an asset manager include one member who has nothing to do with the manager, its shareholders or even its business partners.
The code also suggests that the manager’s supervisory board create a special committee to boost oversight of the company. And it recommends that the manager regularly inform investors about its corporate governance via the internet and in its annual report.
Klaus Stiefermann, managing director of aba, said the association’s members welcomed Gerke’s code.
“It’s an important development in the European debate about improving pension fund governance and transparency on capital markets,” Stiefermann said, adding that both he and German pension fund representatives would “intensely discuss” Gerke’s proposals.
Aba’s pension fund members have €366bn in assets, almost 60% of which are held as book reserves but are being increasingly financed by external funds.
Elsewhere, the Financial Times, citing official sources, said the government plans to raise the retirement age to 67 from 65.