Study: Despite Improvements, Pension Fund Governance Cause for “Concern”

A new paper by Keith Ambachtsheer and John McLaughlin dives into pension fund governance and concludes that, although governance has improved, there are still causes for “concern”.

From ai-cio.com:

Pension funds and other major investors are failing to act sufficiently to promote good governance and long-term investing, according to a new study.

[…]

They found there had been some improvement in governance of pension funds and other major investment institutions, but many “major concerns” still remain.

Ambachtsheer and McLaughlin updated previous governance surveys to add force to the initiative, quizzing 81 major pension funds with total assets in excess of $5 trillion.

“Despite evidence that board effectiveness is marginally improving, our survey-based study conducted in 2014 finds that much work still needs to be done,” the authors wrote.

Among their governance concerns, Ambachtsheer and McLaughlin listed “flawed” board selection processes, unclear board oversight functions, and uncompetitive pay packages hampering recruitment and retention of talent.

“It will require a concerted, ongoing joint effort by pension plan stakeholders, pension organization boards, regulators, and legislators to change the current situation,” the pair said.

The paper, which also covers long-term investing efforts, can be read here.