The Government review, published last week, puts forward proposals to make fund managers publish long-term pledges towards investees.
It says short-term returns sought by fund managers create a vicious circle, with boards seeking to encourage short-term share gain.
As a result, it warns that managers must have better attentiveness to the performance of investee companies over a long as well as a short-term horizon.
It also says fund managers should publicly declare whether they have a specific engagement or a principle of stewardship with a company where this is seen as a means of boosting performance over the longer term.
British Bankers’ Association chief executive Angela Knight says major investors have responsibilities towards firms because they “are owners, not just investors”.
But IMA chief executive Richard Saunders questions the review’s recommendations. He says: “Managers take a wide range of different approaches to managing money, some involving active engagement with the companies in which they invest, some not. We do not believe the regulator should get involved in what is the best way to manage money. That should be between the manager and the client and the authorities should not become involved.”