ABI's chief calls for truce between City and business

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The Independent Online

Keith Jones, the chief executive of Morley Fund Management who has just been appointed to direct investment policy at the Association of British Insurers, has appealed for a ceasefire between institutional investors in the high-profile row about payments for failure and for corporate governance.

Keith Jones, the chief executive of Morley Fund Management who has just been appointed to direct investment policy at the Association of British Insurers, has appealed for a ceasefire between institutional investors in the high-profile row about payments for failure and for corporate governance.

Mr Jones, who will take up the chairmanship of the ABI Investment Committee in May, said yesterday that some fund managers and shareholder organisations had waged inappropriately hostile campaigns against certain businessmen, often through the media.

"I would welcome the opportunity to move towards a more balanced approach with industry, rather than an adversarial one," Mr Jones said.

"At Morley we do have a history of activism but it has been very much behind the scenes - coming out in public very much as the last resort," he said.

Mr Jones added that it was counterproductive to threaten to air disagreements in the public arena and that he even had some sympathy with companies that have chosen to dig their heels in on corporate governance issues. "'If you start threatening to go public, companies get quite rightly more defensive and antagonistic," he said.

However, the appointment of Mr Jones, who has worked for Morley's owner Aviva for five years, is unlikely to represent a more lax approach towards best practice in the boardroom.

Under Mr Jones, Morley has been one of the toughest opponents in some of the recent showdowns between investors and companies, albeit often behind the scenes.

Morley was one of the institutional investors which opposed the mega pay packets of Jean-Pierre Garnier at GlaxoSmithKline last year, contributing to the company's humiliating defeat at its annual meeting.

Morley also opposed Rupert Murdoch's plan to appoint his son James as head of BSkyB.

Mr Jones wants these types of rows to take place in private. Also, despite being one of the early supporters of Derek Higgs' review of boardroom practice, Mr Jones is cautious about how the result of that work will be implemented in practice.

"We need to let this bed down. I take the view that corporate governance in the UK tends to be better than elsewhere with the caveat that we want to avoid box-ticking. It is not right to say 'you're not complying, therefore we are going to pillory you and vote against you at your AGM.'"

Mr Jones, 51, takes over at the ABI from Sandy Crombie, who was forced to relinquish the post six months early after being promoted to chief executive of Standard Life earlier this year. Mr Jones, who will combine the new role with his job at Morley, will chair the ABI's investment committee for two years.

The role is critical to the way the City reacts to companies' strategy. The ABI controls 20 per cent of the stock market, or one in five shares listed in London.

As the chairman of the investment committee, Mr Jones will coordinate the opinions of a string of major companies including Prudential, Legal & General, Axa and Henderson.

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