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British funds industry needs governance overhaul - lobby group

LONDON (Reuters) - The British fund management industry is "ripe for investigation" as part of a broader plan to improve corporate governance at UK firms, the Institute of Directors said on Tuesday. In a policy paper titled 'Priorities for Corporate Governance', the IoD said it sought to promote long-termism and value creation in the investment process, diverse boards and an entrepreneurial corporate culture. The group said it encouraged the government to work with regulators to conduct a further review into the fund management industry "as soon as possible", to help create "a more transparent and governance-oriented share ownership system". Any review should include measures to require fund managers to declare how they vote, the IoD said. Other proposals include support for director training on a "significant scale" to improve corporate governance and boardroom diversity "without the need for excessive and costly regulation". IoD Director of Corporate Governance Roger Barker said it was impossible for the regulatory system alone to guarantee good corporate governance, rather it needed the right culture, attitudes and expertise at board level. "Shifting the boardroom appointments process away from 'the usual candidates' and towards those who can better manage emerging opportunities and risks - particularly in areas like digital technology - should be a key business priority after the next election," he said. "This will necessitate more open and transparent approaches to recruitment, including greater disclosure of appointments processes for directors and, where possible, public advertising of available positions." (Reporting by Simon Jessop, editing by Sinead Cruise)