The problematic nature of UK pension fund regulation: Performing governance at the expense of innovation

Clark, Gordon L.

doi:10.1177/1024529420974608

Cited by 4 publications

(1 citation statement)

References 42 publications

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“…Against the backdrop of financialization, governments have turned to governance as a means to manage financial risks. From more stringent liquidity and solvency requirements (Ebbinghaus and Wiß, 2011) to stricter suitability requirements and codes of conduct for trustees (Clark, 2022), public authorities have largely aimed to intervene in pension funds' internal processes rather than tackle underlying issues of financial market instability. The term 'risk-based supervision' describes this new regulatory approach, whereby the state assesses pension funds' management and mitigation of risks, not by imposing legal restrictions but rather by monitoring internal decision-making procedures (Stewart, 2010).…”

Section: Internal Supervision As Financial Regulationmentioning

confidence: 99%

Regulation from the inside? Internal supervision in Dutch pension funds

Zwan

Golka

2023

Competition & Change

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Political economists have long acknowledged the importance of funded pensions acting as catalysts for processes of financialization. The transformation from rule- to risk-based pension fund governance is particularly important for pension financialization. Risk-based governance involves monitoring of internal decision-making procedures by new professionals rather than compliance with highly detailed legal restrictions. Scholars of financial regulation have termed this kind of supervision ‘regulation from the inside’. Being part of the organization they monitor, internal regulators hold fundamentally ambivalent positions. Existing studies emphasize the duality of internal regulators’ role perceptions as well as their attempts to span the boundaries between themselves and other organizational actors. In this paper, we extend scholarly insights on risk-based supervision of private (non-)financial institutions to pension institutions by focusing on a peculiar form of ‘regulation from the inside’: so-called internal supervisors in Dutch occupational pension funds. Internal supervisors are pension fund functionaries, responsible for evaluating the governing board's performance and holding the board accountable. We report findings from an original survey and interview study among internal supervisors. Contrary to the formal requirement of independence between governing board and internal supervision (a ‘checks and balances’ perspective), we find that internal supervisors often adopt a ‘fusion of powers’ approach that emphasizes collaboration with the governing board. We attribute this finding not only to internal supervision’s institutional design but also to the highly networked character of Dutch pension governance.

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Section: Internal Supervision As Financial Regulationmentioning

confidence: 99%

Regulation from the inside? Internal supervision in Dutch pension funds

Zwan

Golka

2023

Competition & Change

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Appearance or substance of Stewardship and ESG reporting? The challenges of translating ‘commitment’ into tangible outcomes

Tilba

2022

SAMPJ

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Purpose This paper aims to examine the stewardship practices of BlackRock, one of the world’s biggest index managers, to highlight a tension and contradictions associated with demonstrating sustainability leadership and its actual substance. Design/methodology/approach To support its argument, this paper draws on the author’s long-standing industry and academic experience, existing academic evidence and documentary analysis. Findings This paper reveals conflicting data, highlighting a tension between BlackRock’s commitment to environmental, social and governance (ESG) in its public statements and translating this commitment into tangible outcomes through voting, ESG investments and stewardship reporting, which seem to be more assumed than demonstrated. Research limitations/implications This viewpoint is based on a review of existing evidence. It offers some critique on current stewardship reporting practices, which has implications for management and policymakers. It identifies areas for future research in the area of stewardship and ESG reporting. Practical implications This paper highlights the need for a more critical interrogation of investor stewardship and ESG reporting and a more joined-up policy and regulatory approach to stewardship and sustainability reporting. Social implications Improving stewardship practices of asset managers will help enhance the social value created by the financial services sector. Originality/value In drawing on personal experience and existing literature, the originality lies in the combination of arguments brought together to highlight the challenges of making sense of the conflicting ESG reporting data to see how this may impact policies, regulation and future practices in the area of sustainability and ESG reporting.

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Performance sustainability strategy of pension fund managers in the emerging market: A survey opinion perspective

Afolabi

2023

BPR

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The paper examines the performance sustainability of pension fund managers in a developing country such as Nigeria context using survey questionnaires in the collection of data with descriptive statistics and independent samples t-test in the analysis of the data. The opinion of the respondents to the survey questions provides evidence of the existence of several barriers hindering the performance sustainability strategy of pension fund managers these include: a lack of sufficient skills, inadequate innovation, and a lack of adequate processes, etc. However, the respondents also believed that governance and operation, planning, and management are key indicators that sustain the performance of pension fund managers. The study suggests that pension fund managers should develop skills, processes, and innovative solutions to overcome the performance barrier of pension fund managers.

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The problematic nature of UK pension fund regulation: Performing governance at the expense of innovation

Cited by 4 publications

References 42 publications

Regulation from the inside? Internal supervision in Dutch pension funds

Regulation from the inside? Internal supervision in Dutch pension funds

Appearance or substance of Stewardship and ESG reporting? The challenges of translating ‘commitment’ into tangible outcomes

Performance sustainability strategy of pension fund managers in the emerging market: A survey opinion perspective

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