Stephen Haddrill, director-general of the Association of British Insurers, yesterday sought to defend systems of governance at the UK�s top companies and said too much was being expected of institutional investors.

Stephen Haddrill, director-general of the Association of British Insurers, yesterday sought to defend systems of governance at the UK's top companies and said too much was being expected of institutional investors.

The investment industry has been criticised for failing to hold to account the executives of companies such as Royal Bank of Scotland when they made increasingly risky investment decisions in the run-up to the banking crisis.

But Haddrill told The UK Corporate Governance Summit: "My view is that the corporate governance system in the UK is not fundamentally broken.

"There is no reason to believe a different system or a more legislative approach would have served us better."

He said too much was expected of fund managers in their dealings with companies.

"What we have seen is that there is an expectation that the investment community is going to do something that probably it is not entirely set up to do."

He warned that increasingly disparate share ownership was weakening fund managers' influence.

He noted that the insurance industry, which owned 25% of shares on the London Stock Exchange in 2000, had 15% by last summer and "it is probably 12% to 13% now".