UK - The UK Stewardship Code is a positive step in driving corporate governance forward in the UK, but it is not enough, according to Lord Myners.

He told IPE: "The UK Stewardship Code is a positive step in the right direction, and significant progress has been made, particularly within the company with regards to the boards and committees.

"But it is unlikely to be sufficient in itself. There are still significant challenges around developing more effective ownership. If I have an anxiety about the Stewardship Code, it is that too many managers will sign up to it because it is seen as the politically correct thing to do.

"A lot of managers will say they comply with the Code when there are multiple shades of compliance, which blurs the distinction between reactive investors who regard stewardship and governance largely as a matter of voting and meetings, and investors who take it more seriously. Investors need to be sensitive to that fact."

Myners also pointed out that, while a succession of reviews in the UK have paid considerable attention to governance within the corporation over the last 20 years - such as the constitution of the board and the structure of committees - the relationship between the owners and the corporation attracted much less attention during that time.

Yet more investors have been questioning how the fiduciary owners, fund managers and the ultimate owners - endowment funds and pension schemes - failed to forestall excess risk, mispricing and foolhardy acquisitions, particularly in light of the market failures of the last three years.

He said: "The kernel of the broader governance challenge needs us to focus on the relationship between owners and corporations."

However, Harlan Zimmerman, senior partner at Cevian Capital, said that while he had hoped the response to the crisis had been for asset managers to become more long term and hands-on, the trend has been for them to become even more short term and diversified.

"None of these portfolio trends, combined with the lack of incentives for long-term ownership, are conducive to investors being better owners," he told IPE. "In fact, they are promoting exactly the opposite."

According to Myners, one of the problems in UK corporate governance is that the companies appoint the board members themselves, pointing out that, between 2006 and 2010, not a single candidate for a FTSE 100 company board presented to shareholders for election or re-election was rejected by institutional shareholders.

"The problem is that many candidates pass the test of independence because they have not previously worked for the company, but they are not really independent," he said.

"They lack an independent disposition and the confidence to challenge and express opinions, which is why you cannot make an active ownership approach work without focusing a great deal of attention on the board of directors, particularly the effectiveness of the chairman and the extent to which the non-executives fulfil their duties."

In 2001, Lord Myners led a review of institutional investment in the UK and set out 10 principles for best practice that continue to be known as the 'Myners Principles'.

He was appointed chairman of UK operations and partner at active ownership fund manager Cevian Capital at the end of May.

A longer interview with Lord Myners and Harlan Zimmerman will appear in the September issue of IPE magazine.