Managing conflicts of interest

What does TPR say?

TPR says:

  • Make sure you have a conflicts of interest policy in place to help you identify, manage or avoid conflicts for trustees, employers, advisers and service providers. 
  • Outline approaches to adviser conflicts of interest in your conflicts policy, risk register or in other documented procedures.
  • Make sure you're satisfied with your advisers' and service providers' conflicts policies.
  • Make sure you're aware of the services your provider or adviser supply to the employer, and manage any potential conflicts.

Failure to have a process in place can have serious consequences for you, your board and scheme members, leading to poor decision-making, wasted time and cost.

Read the guidance here.

What do we think?

TPR has provided a number of good examples of how a conflict of interest could arise and how the ways of working could be improved.  Note though that it isn’t just actual conflicts of interest that need to be called out – not dealing with perceived conflicts of interest can be just as damaging as members may lose trust in the decisions being made by their trustees.  We can highlight a few more examples (real or perceived):

  • The Scheme Actuary has a duty to report data issues to trustees when carrying out an actuarial valuation.  The Scheme Actuary can feel conflicted if the data issues have arisen due to poor administration and record-keeping services from his/ her own firm;
  • A trustee secretary, working for a firm providing other consulting and/ or administration services to the trustees, may be conflicted if they feel unable to criticise poor service.  The trustee secretarial service may have been offered as an add-on to the main service(s) without perhaps any thought as to the potential conflict of interest that could then arise;
  • An investment consultant working for a firm that does not provide fiduciary management (FM) services is commercially reluctant to advise a trustee to go down the FM route as although (s)he can provide an oversight service, the resulting revenue to the firm will drop;
  • One of the trustees fails to share relevant information due to a duty of confidentiality to another party not realising the duty (s)he also has to fellow trustees.  This issue can become clouded if, for example, they are appointed by and remunerated by the sponsoring employer or some other nominating body.

A good chair will be able to spot these and navigate the trustee board through them.  In practice, none of these examples will present themselves in such a ‘black and white’ way; most professionals will do their utmost to do their best for their client.  But it would also be naïve to assume that conflicts of interest, whether real or perceived, can always be avoided; it is recognising when they exist and managing them that is key.

Indeed, if you are approaching an adviser to tap into his/ her experience, it is unlikely that no conflict of interest exists.  However, an experienced adviser should be able to articulate what those conflicts might look like and how they will be managed.  Perhaps an adviser that is unable to do that is not as experienced as you think they are!

It should also be said that sometimes so‑called conflicts of interest are not as such; they are in fact an alignment of interests albeit from different perspectives.

What do others do?

Conflicts of interest policy

TPR says you should have one. In fact, having one can be an education in itself and helps trustees to decide what actions to take when conflicts of interest are identified.  A well-governed trustee board will treat their conflicts of interest policy as a living document to be reviewed from time to time to consider new situations as they arise.

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TPR says you should have one. In fact, having one can be an education in itself and helps trustees to decide what actions to take when conflicts of interest are identified.  A well-governed trustee board will treat their conflicts of interest policy as a living document to be reviewed from time to time to consider new situations as they arise.

Many trustee boards are alive to conflicts of interest.  They are reminded of them when relevant at each trustee meeting either at the beginning of their agenda or just before the relevant item is being discussed.  This appreciation of conflicts has usually come about through articulating and sharing identified conflicts of interest, through regular training sessions on the subject and through self-aware advisers that are at pains to set out potential conflicts of interest in any advice they may be giving.  A good chair will also have the courage to call potential conflicts of interest out so that all the issues can be aired in a fair and transparent manner.

How can we help?

    We can provide you with a comprehensive templated conflict of interest policy taking into account your circumstances.  We can also work with you to modify your working practices so that these conflicts of interest are more readily identified, managed and recorded appropriately.

    Don’t let a conflict of interest, potential or otherwise, go unnoticed, especially as the perception of a conflict (whether real or not) can damage your credibility in the eyes of scheme members thus losing their trust in you.

Who to contact

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Lindsay Hawkins

My expertise is in Trustee governance and risk management. I help Trustee Boards and sponsoring employers ensure their governance is top-quality.

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What do you do?

I specialise in outsourced pensions management, trustee governance and effectiveness projects and help Trustees evaluate their executive resource needs.

What is your background?

I’m a Fellow of the Pensions Management Institute and been involved in managing pension funds for almost 20 years. Most recently as Head of Pensions & Benefits for Rexam PLC (a FTSE 100 company recently acquired by a US competitor, Ball Corp). Prior to that I held a pensions management roles in-house for Fujitsu Services and was Pensions Manager for Société Générale Corporate & Investment Bank. Going back even further, I worked in the consulting environment, primarily in outsourced pensions management roles.

What do you bring to Muse?

A lot of practical experience of how to run a pension fund well and get things done. Most of my in-house roles have involved dual aspects being both Head of Pensions/Pensions Manager for the sponsoring employer but also Secretary to the Trustee Board. I therefore understand, in depth, the business drivers for both sides and how to reach solutions which work for everyone. I work best by building good relationships, so enjoy creating teams where everyone understands the pension arrangements’ objectives as well as the strategy for getting there – which really helps Trustee Boards measure success.

What do you do for fun?

It may not be everyone’s idea of fun but my husband and I help out in our local church. Community is important to us both plus it’s great to have lots of friends locally when you lose your keys. Having a desk job means I like to be active whenever I have some free time so I’m a regular at my local gym, I love street dance, weights and yoga - but not all at once. I’ve also been on a lifelong quest to become a wine connoisseur but require much more practice.

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Barry Mack

I specialise in governance, trustee effectiveness, pension management (including administration) strategy and large change management projects.

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What do you do?

I am a Director of Muse Advisory and specialise in DB & DC pensions, governance (especially funding, investment and risk management), trustee effectiveness, outsourced pensions management, pension management (including administration) strategy and large pension change management projects. I particularly enjoy facilitating trustees to fully articulate their objectives and beliefs and, consequently, to be as effective as they can be.

What is your background?

I’m an actuary and have worked in governance, administration consulting and DC arenas at Mercer and Hymans Robertson. At Hymans Robertson I was a partner, Head of Governance, Risk Group chairman and DC Governance Committee chairman.

What do you bring to Muse?

More than 30 years of financial, pensions and business experience supported with strategic, technical and commercial skill, and a heavy dose of pragmatism.

What do you do for fun?

Bellringing, photography, Lego! And watching F1 with my two (now grown up) sons.

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Julia Land

My expertise is in trustee effectiveness and governance reviews, related work on succession, training, one-to-one feedback and facilitated Trustee workshops e.g. on review actions, on strategic planning. I have worked with over 90 boards in the past few years including many well-known pension schemes and more widely with FTSE companies and non-profit organisations.

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What do you do?

I’m a Senior Adviser at Muse. I work with boards advising on effectiveness and governance development.  Nowadays I focus on pensions organisations and have been doing this type of work with Muse since 2009, mainly with trustee boards of large, complex schemes.

What is your background?

I’ve been advising boards on effectiveness and board development for about 14 years and I’ve worked with a uniquely wide range of around 90 boards: pensions trustee boards, FTSE 100 and 250 plc boards, investment organisations, complex NHS groups, non-profits.

My earlier career was in investment at Deutsche Asset Management and UBS/Warburgs and in finance at Arthur Andersen & Co, in all those roles working closely with client boards.

I hold the PMI Award in Pensions Trusteeship and I’m an ICAEW Fellow. I’m an experienced coach and qualified on leadership development tools such as Myers Briggs.

What do you bring to Muse?

What I aim to bring is listening skills, proportion and a sense of humour.

What do you do for fun?

Mainly revolves around the outdoors, food and music. 

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Rosanne Corbett

I specialise in pensions and benefits governance, trustee effectiveness, workshop facilitation, change projects and risk management.

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What do you do?

My work is varied; from trustee board effectiveness reviews, implementation and embedding of risk management frameworks, advising on trustee objectives and long-term strategy and providing executive pensions support on an in-house interim or fully outsourced basis to reviews of the DC market and provider selection exercises, including master trusts. I’ve found being able to implement and embed the advice I provide from working in-house as an interim pensions/ governance manager to be challenging yet very enjoyable. I have provided corporate support in periods of change where no in-house pensions expertise existed and have integrated into existing in-house teams to provide hands-on support for business as usual activities and strategic projects. I have managed large-scale change projects on both sides of the fence, giving me a good perspective on trustee and company drivers and what success looks like.

What is your background?

I have worked in pensions and employee benefits since 1999. The majority of my career to date has been spent advising and supporting trustee boards and companies on good governance and how to manage risk. I started my career as an international employee benefits consultant at Mercer, helping multinational companies design and implement benefit structures. From there I moved to corporate strategy and developed a penchant for governance. I have worked with multinationals to introduce global governance frameworks and review how they manage benefit-related financial and operational risk globally.

From global, I moved to local and became heavily involved in UK-specific pensions and trustee governance and board effectiveness as the Pensions Act 2004 came into force. This then led me in 2010 to Muse Advisory. My passion is really about working with people and making things happen, be that trustees understanding their objectives and implementing a strategy to achieve them, to pension teams being able to deliver an excellent service, working in partnership with their trustee boards and advisers.

What do you bring to Muse?

My get up and go. I am quite a driven person and like to learn new things. I like to bring new ideas to my colleagues, clients and Muse. Mostly, I bring energy and passion - I genuinely love what I do.

What do you do for fun?

I love the outdoors, where you'll find me horse riding or walking my dog. My other passions are amateur astronomy and art, but I never seem to have the time to fit everything in.

I've also spent seven years as vice chair of a school governing body. Being a governor has made me appreciate the time and energy that trustees need to commit to do a good job!

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Muse Advisory helps trustees and companies to better govern and manage their pension schemes. We believe that good governance leads to improved outcomes for members; through better fund performance, effective and proportionate management of risk, value for money and cost efficiencies and strategic and dynamic decision making.

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