Reviewing the benefits that have accrued to institutional investors from Big Bang, Mr D A Walker, an Executive Director of the Bank, reflects I) on the role and responsibilities of pension fund managers in sustaining a free and competitive environment in the future. He stresses in particular that 'those with most muscle on the institutional side of the securities market place should use their bargaining power judiciously, having regard to the future structure of the market that they want to be able to operate in as well as the minimisation of their costs now'; and underlines also the advantages of encouraging the development of more free-standing research capacity, separately remunerated.
He suggests that if the liberal market environment in which pension fund managers operate is to be upheld, it is essential that the privilege this represents be exercised with commensurate responsibility, and suggests, as possible areas of specific initiative towards this end:
- a fresh examination of the responsibilities of trustees, their role in the formulation of pension investment strategies, and the legal framework in which all this is set;
- early progress in the promulgation of a code of best practice for listed companies which could commend a minimum proportion of independent directors and the introduction of audit committees;
- early progress, by the Accounting Standards Committee and others, towards a code of best or recommended practice and, eventually, a standard on disclosure of spending on R and D and innovation.