Future fund to be a responsible shareholder
David Murray
Future Fund chair David Murray has declared that the fund will not interfere in the corporate governance affairs of the companies it is invested in to a greater extent than any other responsible shareholder in the marketplace.
Speaking at the recent Deloitte/Investment and Financial Services Association (IFSA) Future Leaders Awards Murray said: “Our starting position on corporate governance goes to a question of responsibility. The rights attached to shares which anybody owns include voting rights and they are important to the economic value of those shares.”
“We cannot duck the responsibility of exercising our right, so we won’t duck that responsibility. But I like to think of that responsibility as a wise investor would,” he added.
Murray revealed that he thought the most effective way large institutional investors could make a difference and help in achieving more efficient management practices in companies was through engendering ideas and expressing a point of view rather than engaging in the adversarial use of proxies.
“Our start would be one of a wise, helpful investor, and we’ve got just the board and the people to do that,” he said.
Murray explained the fund would operate on a similar basis to a “fairly large” superannuation fund.
However, he said the board was determined to actively participate in the broader investment community and in doing so interact with the full spectrum of market participants.
“I think we would like to, in the Future Fund, engage the investment community at a number of levels, [including] experts around the world to get their views. We would like to engage the academic community in Australia to actually become a bit of a catalyst on new thinking,” Murray said.
The Future Fund is currently in the process of finalising its administrative and management team and, as such, is in no position to make any investments presently other than cash.
Establishing these structures remains a priority for the fund and Murray expects most of these issues to be resolved once Paul Costello, who was appointed Future Fund general manager back in August, takes on his new role in November.
Murray said that once Costello was on board an asset consultant, chief investment officer, custodian and the transitional managers for the fund could all be selected. He expected all of these components to be finalised by early 2007.
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