Pension Funds and Corporate Governance Ricardo Escobar Carey

Pension Funds and Corporate Governance Ricardo Escobar Carey y Cia. Ltda. Chile

The Questions • Should and can Pension Funds promote adequate corporate governance? • If so, do they need additional powers and special rules? • And, how deep should it be their involvement in management?

The Basics • Pension funds manage pension funds – Look for best return – Look for safe return – Look for liquidity • Pension Fund corporate governance v/s third party corporate governance

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Comments and Conclusions • Yes, Pensions Funds can and must promote sound corporate governance – They are owed to their clients who pay for it – They need deep and liquid securities markets

Comments and Conclusions • Pension Funds are powerful players • Strong minority shareholder rights, they don´t need additional rights • Strong Pension Funds corporate governance rules

Comments and Conclusions • Pensions funds cannot be controllers • Pension funds must be alert to management • Government must be alert to pension funds sleeping • Pension investors must be given efficient actions against negligent pension funds management

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