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Trustee Effectiveness: The Need for Strategic Choices Anil Verma and Johanna Weststar University of Toronto To be read in conjunction with “What Makes for Effective Labor Representation on Pension Boards?” by Johann Weststar and Anil Verma (Forthcoming 2007, Labor Studies Journal) and “Just Having a Voice is Not Enough: Labour’s Voice on Pension Boards,” by Johanna Weststar and Anil Verma (Forthcoming as a chapter in Socially Responsible Investment of Union-Based Pension Funds, Jack Quarter, Isla Carmichael, and Sherida Ryan (eds.) University of Toronto Press, Toronto FACTORS RELATED TO TRUSTEE DEVELOPMENT Union’s Strategic Choices Accountability Structures Recruitment and Selection Training and Learning Networks Board Integration and Participation SOME FINDINGS… 88% feel like integrated and participating board members BUT evidence of: - Lack of training Lack of social networks Lack of prior exposure to pension issues Lack of guidance from unions None Poor Minimal Adequate Good Excellent 11% 8% 27% 25% 21% 8% LEVELS OF STRATEGIC CHOICES Full participation with a stakeholder perspective Full participation in a traditional fiduciary role A Seat on the Board At each level implications for trustee selection and support grow and change D Seat available to Union? Campaign for a seat No D1 SPECIFC DECISION POINTS Yes No D2 Take a seat? Denotes decision points Leave Governance To Others Yes D3 Finance Professional D6 Fiduciary Duty alone guides trustee conduct Labor Insider “Regular” Trustee Fiduciary Duty+ Proxy Voting+ SRI+ETI+…. D4 Labor Activist Formal Accountability to Union/Membership D5 Self-paced Reporting PENSION GOVERNANCE: A STRATEGIC OPPORTUNITY FOR LABOUR • BUT unions need to express a comprehensive and proactive policy on their role in pension governance • AND decisions about trustee selection and development must be aligned with these strategic decisions Two Broad Debates 1. Strategic Union Agenda – What do unions want? • Traditional fiduciary • Broad stakeholder role 2. Trustee Selection and Development – How do they get it? • Human Resource Model? • Nomination / Political Model?