PracticeConsultingProfile: Linday Tomlinson, chairman of the IMA

Profile: Linday Tomlinson, chairman of the IMA

Lindsay Tomlinson, chairman of the Investment Management Association, the revamped trade body for the UK investment management industry, has his work cut out for him.

Last week he had to pacify company directors over shareholders’ increased activism by arranging a ‘peace-talks’ dinner. The IMA is also facing renewed frustration from company bosses due to proposed reforms to corporate governance.

Such a shake-up will inevitably lead to yet more probing questions from institutional shareholders, represented by the IMA. It is something directors will feel they could do without, after months of activism in sensitive areas, such as executive pay deals and top-level appointments.

Tomlinson says the differences have arisen because of the new combined code on corporate governance drawn up by the Financial Reporting Council.

But the IMA is making headway. Sir Bryan Nicholson, head of the FRC, last week acknowledged the increasingly strained relationship between companies and investors, and praised the IMA for hosting a bridge-building dinner between the two parties.

Sir Bryan said: ‘For this dialogue to develop into a constructive relationship, certain building blocks need to be in place. You need a framework with which all are happy – a shared understanding of what both groups can expect of the other. You need clear lines of communication. And you need behaviours that reinforce all this.’

He also claims that companies have been up against ‘competing codes, and guidelines developed by different investment bodies’ that are inconsistent.

Sir Bryan said: ‘This creates real problems for companies, who do not know which of the conflicting guidelines they should follow.’

Formed in February 2002 as a result of a merger between the Fund Managers’ Association and the Association of Unit Trusts and Investment Funds, the IMA’s members represent more than £2,000bn worth of assets.

Tomlinson is European vice-chairman of Barclays Global Investors, and a member of its executive committee. He has been responsible for BGI’s European businesses for more than 10 years. He is a Cambridge mathematics graduate and a Fellow of the Institute of Actuaries, as well as chairman of the FTSE policy group.

In October last year, Tomlinson said he wanted the IMA to avoid gaining a reputation as ‘a defender of the status quo’, and avoid being ‘pigeon-holed as a backward-looking, regressive organisation’.

The recent ‘peace talks’, resulting in the agreement to set up a working group of institutional investors and company bosses, proves he has already gone some way to avoiding that trap. But future obstacles will further test his ability to represent a group of people determined to voice its opinions and use its power to bring companies to account.

As a long-standing member of the investment community, Tomlinson recognises the problems of a ‘first-generation industry’ at a crossroads, and is prepared to take the knocks. If his fighting talk continues to translate into action, then he’ll do little wrong.

But his first priority must be to continue smoothing the ground between investors and company executives to ensure meaningful dialogue. The news that an FRC group is set to overhaul the way companies assess their internal reporting systems is unlikely to make his job any easier.

Still, his home life must offer him some solace from the world of investment.

Then again, perhaps just a little distraction. With five children and six Labrador dogs, it can’t fail to do so.

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