Sovereign wealth funds: What is Santiago for?
Despite signing up to the Santiago Principles, most sovereign wealth funds don’t observe them, nor do they have to. Isn’t it time the markets lost patience with their ‘I signed, therefore I am transparent’ approach?
Peter Costello, chairman of the Australian Government Future Fund
Peter Costello faced a challenging gig. The chairman of the Australian Government Future Fund, better known to many as the country’s longest-serving treasurer, under John Howard’s government, was presenting a keynote speech at a sovereign wealth funds conference in Milan, but found himself addressing a room full of people milling around a buffet table.
It was not the easiest crowd to enthral with a presentation on the Santiago Principles, the voluntary code of governance and best practice that aims to bind sovereign funds.
But a veteran of 12 Australian federal budgets is not easily deterred and, talking through a quite unnecessary microphone in a gilded ballroom of the Hotel Principe di Savoia, he used hyperbole to win over the crowd.
“Because I am a chairman of a sovereign wealth fund, I always carry the Santiago Principles with me,” he boomed, as the PA speakers wobbled on their stands under the onslaught from the big man’s sonorous voice. “I carry them close to my heart. I go to bed with them at night. I put them under my pillow.