International governance standards will be imperative as institutional investors continue to diversify their assets into global markets, International Corporate Governance Network (ICGN) executive director Anne Simpson said.
Simpson echoed comments made on Monday by Industry Funds Management chair Gary Weaven.
"As Gary highlighted this week, Australian superannuation funds are increasingly investing in offshore markets. As global investors in other people's markets, it is important to be aware of international governance standards," Simpson told an audience yesterday at the Conference of Major Superannuation Funds.
Simpson noted that with the development of emerging markets, investors should also ensure the development of governance frameworks in those markets.
"Emerging markets represent a big portion of the world's economy. They are our economic future and can't be ignored."
"We need to start a dialogue with them to ensure their capital markets meet governance standards," she said.
As China has an internal savings rate of 40 per cent, Simpson said it was important that this capital is deployed effectively.
"If this money is invested in China's companies than China needs to ensure that those companies have the technical know how and proper governance standards," she said.
China needs to operate like a developed capital market, not a casino, she said.
Simpson is travelling to China to provide governance advice on the country's public companies.
"As funded retirement systems come into place, where will be the safe haven for investments? This is why corporate governance is important," she said.
