(March 13, 2013) - There is an index for pretty much everything: hedge funds, pension risk transfers, Big Macs.
Soon, there will be index for pension governance, too.
The Royal Mail Pension Plan has teamed up with Telent's scheme and the Superannuation Arrangement of the University of London (SAUL) to try and answer a pressing question: What is the best way to govern a pension fund? The three schemes are tackling this question via crowdsourcing, and turning the results of their survey into an index.
The project's website outlines the three funds' reasoning for launching this initiative:
1. Royal Mail, Telent, and SAUL's pensions needed better governance resource information for their own decision-making, and they assumed others would too.
2. They believe the results will help funds achieve greater efficiency by learning lessons from others in the industry, and for smaller schemes to learn from those with more resource.
3. They hope that the initiative will be a catalyst for a more informed industry-wide debate around governance issues.
The survey (excerpted below) has six sections, asking basic information about the fund, and specifics as to governance structure, payroll/third-party adviser costs, division of responsibilities, and governance development. All of the information collected will be kept confidential, the website promises.
To incentivize funds to participate in the index, the project will provide each respondent with a tailored benchmarking report detailing how their governance resources stack up to other funds' of similar size and administrative approach.
Governance has become a hot topic among institutional investors around the globe. Funds are taking a more active role as shareholders, pressuring public corporations such as Disney and JP Morgan to restructure their boards for greater independence. As for internal governance, aiCIO hears the same refrain from successful CIOs over and over again: "We have a great board, and that makes the job much easier." –Leanna Orr
To participate in the pension governance index, click here.
