Responding to the publication of the Kay Review today (Mon), Joanne Segars, Chief Executive of the National Association of Pension Funds (NAPF).

This report offers some useful, practical ways forward. Equity markets must work more effectively in the long-term interests of investors and savers, who need to be able to see that they are getting value for money. The NAPF is pleased to see Kay say that transaction costs and stock lending income should be set out more clearly. Boardroom pay must also become more transparent and more strongly linked to long-term performance.

Most pension funds delegate responsibility for company engagement to an investment manager, and Kay is right that this relationship needs to be reshaped if good corporate governance is to develop further. Pension funds need to hold their managers accountable for delivering long-term returns, and quality stewardship should be a key factor when picking or reviewing investment managers. However, at present there are many competing priorities for trustees, and managers capabilities are difficult to assess.

Our members regularly engage with companies on routine and more serious matters. This approach fits well with Kay suggestion of a forum to encourage collaboration among domestic and overseas investors, and I something funds will be keen to get involved in. We strongly support the Stewardship Code and welcome the new best practice statements for asset owners. These could encourage pension funds to be more explicit in their expectations of their asset managers and more rigorous in holding them to account. We plan to incorporate the relevant parts of the statements into our Corporate Governance and Voting Policy and Guidance on the application of the Stewardship Code.