Innovative models of pension fund governance in the context of the global financial crisis

Principles and Policies for In-House Asset Management

“…The idea is to root the fund's investment style and strategy in a clear assessment of the organization's capabilities and the resources at the disposal of staff. Similar to using a 'risk budget' to guide portfolio construction and investment decision-making, institutional investors should use a 'governance budget' to guide the process of investing, the development of the organization and the guidance of management (Clark and Urwin, 2010). 1 A good Board will recognize the unique nature of the financial services business and compensate internal staff accordingly.…”

Public Pension Fund Management: Best Practice and International Experience

“…Similarly, if one were to trace the origins of the governance and management model developed in the early 1990s by the Ontario Teachers' Pension Plan (OTPP), arguably one of the most successful and sophisticated pension funds in the world, one would find that “running the fund as a business” was the explicit maxim espoused by the fund's senior executives at the time . And this is not just a Canadian phenomenon: Clark and Urwin () find British pension plans increasingly adopting the protocols and procedures taken from the UK model of corporate governance.…”

“…A series of seminal papers by Clark and Urwin (2008a,b, 2010) brought together several strands of research and laid the foundation for the modern approach to governance of institutional investors. Their work, based on empirical research and inductive analytical logic, produced an internally consistent and comprehensive framework that can be used to evaluate how individual asset owners match up against an idealistic set of best practices.…”

The Contested Role of Investment Consultants: Ambiguity, Contract, and Innovation in Financial Institutions

“…Because of its size, and because of its importance to the sponsor or sponsors, the board is likely comprised of individuals who have a representative role and knowledge of financial issues consistent with the mission of the fund, if not specifically about investment management. These are rare individuals, and often command terms and conditions of appointment consistent with being a board member of a large corporation (Clark and Urwin 2010). This fund has a four-tiered governance structure with significant investment capabilities and resources located within the organisation.…”