Robert Jenkins, chairman of the Investment Management Association and co-chair of the Treasury commissioned Asset Management Working Group, has called for fund managers to show more 'will power' in challenging boards of the companies in which they invest.

Speaking at the launch of the working group's report Jenkins said: 'Whether you think investors can influence a board before a crisis is debatable. Whether you think investors can hold a board up to account is not debatable. There has not been the will power to hold directors to account after they've failed.'

City minister Paul Myners agreed: 'I'm sure the financial crisis has as its core a collapse in governance at a number of institutions.'

He asked how the boards of banks were allowed to make grave mistakes by their shareholders. 'Now you see the lacuna in the RBS remuneration strategy, but it was there in the annual report, approved by shareholders.'

However, he accepted that non-executive directors, who were in an even better place to challenge executive directors, also needed to raise their game.

The report, 'Asset management: the UK as a global centre', backed calls for fund managers to become far more active in corporate governance in the wake of the financial crisis.

It said that if the recommendations of this summer's Walker review were implemented they would enable asset management groups to engage more effectively with company boards.

In July Sir David Walker, former chairman of Morgan Stanley International, put forward thirty-nine recommendations to make the boards of large banks more accountable. These included setting the FSA to monitor conformity and disclosure by fund managers and getting institutional shareholders to agree a memorandum of understanding on collective action against errant companies in which they invest.