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LATEST NEWS:

Muse Advisory

musings

Who leads by example?

April 2011

"Good boards are created by good chairmen"1 - a statement which is arguably as true of pension trustee boards as it is of corporate boards. It lies at the heart of board effectiveness.

Last month, the Financial Reporting Council (FRC) published new guidance on board effectiveness. It is aimed at the boards of listed companies and seeks to encourage directors to consider how they can lead their companies most effectively.

Although the new guidance is specific to the world of business, the central themes - about leadership and effectiveness of the board - are generic and speak as much to trustee, as to corporate, boards. Particularly relevant issues for trustees include: what makes an effective board; the role of the chairman and individual board members; the adequacy of board support; the process of decision-making; as well as board composition and the process of evaluating board performance. Board evaluation, in the words of the guidance, "provides a powerful and valuable feedback mechanism for improving board effectiveness, maximising strengths and highlighting areas for further development."2

It is now 10 years since Paul Myners made his recommendation that trustees "should make formal assessment of their own procedures and decisions as trustees."3 Trustee board chairmen, in creating the conditions for overall board and individual trustee effectiveness, could well look for example and inspiration to the FRC's recent publication.

Andrew Mitchell

1 Financial Reporting Council, Guidance on Board Effectiveness (March 2011), paragraph 1.4
2 paragraph 5.1
3 The Myners Review of Institutional Investment in the UK: Report March 2001

Muse Advisory would like to thank Andrew Mitchell for contributing this very timely Musing. Andrew is a Chartered Secretary, formerly company secretary of Scottish Power plc, and now works as a consultant in corporate and pensions governance and professional pension trusteeship.

More Musings...

March 2012

An abundance of talents

Stewardship as a concept has been applied in a diversity of realms, from the religious and domestic (historically) to many other fields today. It embodies responsible planning and management of resources and is usually linked to the concept of sustainability. Read more >

March 2012

The Universal approach to auto-enrolment

Longevity had not been an issue that had greatly troubled employees at Universal Exports (UK) Ltd – so a pension scheme had not featured amongst the company’s recruitment and retention tools. But as the Cold War receded from the corporate memory so M grew concerned about the consequences of twenty-first century spooks developing grey hair. Read more >

February 2012

DC Governance: What can we learn from our DB past?

As the UK private sector continues to abandon defined benefit pension provision and increasingly embraces defined contribution plans (and soon, auto enrolment), we should take the time to learn from our DB past to ensure robust governance of DC plans, both contract and trust based, for the future. Read more >

March 2011

As ye sow, so shall ye reap

A brief thought on faith, for trustees and DC members Read more >

September 2010

Want to redesign your chair?

Many pension trustees find their role challenging, but rewarding. Some trustees however not only feel comfortable, but are also happy to chair the trustee board – a role that would be simply too daunting for many. Perhaps those who have the potential to chair a board successfully but lack a little confidence might be helped if more trustee boards were to define the role. Read more >

July 2010

Pension outsourcing – leaving the game plan too late?

Some very large pension schemes are now considering outsourcing administration to a third party administrator (TPA) where, five years ago, it would have been relatively uncommon. Read more >

March 2010

SLAs: simply not enough?

Relationships based mainly on performance driven SLAs are not enough; instead build your overall expectations into the contract and spend time on the whole of the relationship to make it work. Read more >

January 2010

Fiduciary management - is it the easy option?

Trustees are increasingly being offered more complex and complete solutions to meet the challenge of investment governance. While some propositions will suit some schemes, outsourcing is not necessarily a quick and easy fix to the problem of an overwhelming investment workload. Read more >

January 2010

Be prepared - economic crisis exposes risks in service continuity

Corporate takeovers may have become relatively scarce over the last two years, but they are returning as confidence in financial markets rebuilds. Read more >

January 2010

Performance Management of Advisers - don't monkey around

Performance management of professional advisers and service providers is an essential element of good pension fund governance. It should extend to all significant contracts and not be limited to investment managers who can conveniently demonstrate hard performance numbers. Read more >

December 2009

Good Governance - Keeping Pensions Safe

Muse Advisory responds to the Pensions Regulator's new campaign to improve pension scheme governance Read more >

December 2009

Implications of Straight Through Processing

We live in the internet age. We bank, shop and entertain ourselves online and it’s all getting faster and hopefully safer. The pensions industry is catching up through the Straight Through Processing (STP) initiative. But what are the implications when it does? Read more >

September 2009

Ready for the challenges presented by web-enabled pensions systems?

Web-enabled administration systems feature transparent access to information and services that is highly valued by members. But enhanced transparency introduces fresh challenges over and above those laid out by the Pensions Regulator. Read more >

June 2009

Time for a trustee reality check?

You can’t turn on the TV without stumbling across some reality programme offering one lucky person a life-changing career opportunity. To date this approach has not been used by Alan Sugar to recruit a new member onto his pension scheme trustee board (if he has one) – and let’s hope that never happens – but it is time to take a look at how trustee boards can attract the best talent for this demanding role. Read more >

May 2009

The emperor’s wearing no clothes!

We need people who aren't afraid to ask the obvious questions. Read more >

December 2008

Fonda ... with a twist of Lennon

It was sometime around 1998. We were sat in a Trustee Board meeting, digesting lunch and deliberating on asset allocation. Read more >

October 2008

Crisis? What Crisis?

Can trustees be accused of sunning themselves abroad? Or have they stayed ‘at the coalface’ this year? Are you a trustee? If so, have you been on the front foot and asking questions of your advisers as the credit crunch has developed? Read more >

April 2008

Trustee governance software and secretarial services - Does independence matter?

There has been some debate recently on whether trustee boards should purchase governance software from one of their advisers, or seek an independent source. Similar arguments apply to the provision of trustee secretarial services. Read more >

February 2008

Sound Contingency Planning Reaps Rewards

Many pension schemes think about planning for contingencies when reviewing internal controls and compiling risk registers, but should their planning extend further? Read more >

September 2007

‘Good contract management makes good partners’

What is the single largest factor contributing to the failure of outsourced administration? Read more >