Governance under scrutiny

Issues such as the widely reported controversy surrounding one Malaysian Development and concerns surrounding holdings in government-linked investments have put governance standards at the centre of the agenda for sovereign wealth funds (SWF).

That is why delegates at the October 2015 meeting of the International Forum of Sovereign Wealth Funds (IFSWF) debated the Santiago Principles, a framework of generally accepted principles and practices that reflect best practice governance, accountability and conduct of investment practice by SWF.

We are a leading adviser to institutional investment funds and we apply international standards to independently verify the implementation of the Santiago Principles for SWF clients.

The 24 principles include:

  • the governance framework and objectives, as well as the manner in which the SWF’s management is operationally independent from the owner, should be publically disclosed;
  • the SWF’s investment policy should be clear and consistent with its defined objectives, risk tolerance, and investment strategy;
  • the SWF’s investment decisions should aim to maximise risk-adjusted financial returns in a manner consistent with its investment policy;
  • the SWF should have a framework that identifies, assesses and manages the risks of its operations;
  • the assets and investment performance (absolute and relative to benchmarks, if any) of the SWF should be measured and reported to the owner according to clearly defined principles or standards.

For further information contact Geoff Woodhouse who is based in our London office.

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