Fund Managers Embracing Governance Principles Amid Regulatory Challenges

Strategic Insights -

In a recent global survey conducted by Create and KPMG International, 40% of fund managers expressed concerns that there has not been an improved relationship between regulators since the Enron scandal. CNBC's Bianna Golodryga, joined by Amin Rajan, CEO of Create, discussed the findings and implications of the survey. Rajan emphasized that fund managers have started adopting new governance principles and infrastructure, monitoring benefits and behavioral changes over the past three years. The survey revealed complex factors affecting fund managers' implementation of regulations, including cultural and behavioral aspects.

Key Takeaways:

  • 40% of fund managers believe there has not been an improved relationship between regulators post-Enron, as per the Create and KPMG International survey.
  • Fund managers have started adopting new governance principles and infrastructure, with a focus on creating a new governance infrastructure and monitoring benefits.
  • Behavioral and cultural factors are influencing the implementation of regulations by fund managers, going beyond the letter of the law.
  • Fund managers are shifting from merely staying on the right side of the law to taking an extra mile to protect client interests and provide greater transparency.
  • The relationship between regulators has improved significantly, with service quality and decision-making also improving.
  • However, costs have increased, and bureaucracy has grown, with a more noticeable positive impact in Asia-Pacific compared to the U.S. or Europe.

Statistics:

  • 40% of fund managers expressed dissatisfaction with the regulatory relationship post-Enron (Create and KPMG International survey).
  • Over the past three years, fund managers have witnessed significant improvements in governance practices, with 50% of respondents noting increases in governance (Create and KPMG International survey).
  • The number of fund managers adopting new governance principles and infrastructure has increased significantly, with 65% of respondents noting enhancements in governance (Create and KPMG International survey).

Sources:

  • CNBC/DOW JONES BUSINESS VIDEO ANALYST INTERVIEW BIANNA GOLODRYGA, CNBC ANCHOR
  • Create and KPMG International survey
  • CNBC/Dow Jones Desktop Video, LLC
  • Voxant, Inc. (www.voxant.com)