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The seven features of well-run trustee boards

Insights from the Pensions and Savings Conference 2019

Pension Board and Trustee Consulting|Pensions Corporate Consulting|Pensions Technology|Retirement

December 3, 2019

Life for pension funds is already challenging. But over the next decade, the pace of change will accelerate even further, said Roger Urwin, global head of investment content in our Thinking Ahead Institute, opening the conference.

This may sound daunting, but there is a silver lining: there are many opportunities for trustee boards to do good work in the face of a “Great Acceleration” of change caused by Brexit, geo-politics, climate, technological leaps, and macroeconomic instability, among other factors. The key to success will be organising trustee boards to manage change effectively. Here are the seven key features of well-run boards.

top 7 features of well run trustee boards
The 7 key features of well run trustee boards
1. Stay focused on the big picture

Retaining a strategic focus is vital to effective board governance. “Boards don’t have to do too many things, they have to make sure that things get done,” Urwin told the audience.

2. Delegation is key

Following on from the first point, delegating is one way to ensure a strategic focus is retained at board level. For some this means using your internal team. If that isn’t feasible, the outsourced CIO/fiduciary management model is an efficient model through which trustee boards can delegate detailed investment decision-making but retain a strategic focus.

3. Disciplined oversight

It is the diligence of trustee boards that is vital. Investment committees need to have individuals with key competencies, said Urwin. Here, it’s a good idea to look to international examples of best practice, he suggested.

4. Sized appropriately

“Five is a good number for an investment committee,” said Urwin. This is large enough to ensure a wide range of expertise, but small enough that decisions can be made efficiently.

5. An effective chair

The chair’s role is crucial in terms of setting overall strategic direction and the culture of the board and organisation. They are responsible for best practice and ensuring a high standard, said Urwin.

6. Diverse thinking and unified decisions

“Differences of opinion are inevitable, but you have to make sure the board confronts these differences and comes together with something that is unified,” Urwin said.

7. Well-grounded principles and beliefs

This is a relatively new feature of a well-run board, having come to prominence over the last decade or so. With sustainability rising up the corporate agenda, having a central set of well-socialised principles and beliefs has been enormously important to get right, said Urwin.

Next Chapter: Why diversity matters

Title File Type File Size
Pensions and Savings Conference 2019 Overview PDF 1.5 MB

Roger Urwin
Global head of investment content,
Thiking Ahead Institute

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