Any Other Business: When we started this feature a year ago this week, its aim was to help trustees get to grips with the more oblique aspects of their role – from how to negotiate the best deal for your scheme in a merger, to what happens if you need to fire a fellow trustee.
At the heart of the idea was a belief in the value of sharing intelligence. Since Steve Jobs went to Xerox Parc in 1979, technology companies have spoken about 'opening the kimono', or sharing information about their inner workings with the rest of their industry.
The pensions industry is full of intelligent, committed people and everyone can benefit if they share what they have learned on a wider stage.
But what can schemes stand to gain from opening the doors on how they manage their activities?
We often keep our kung fu to ourselves for fear that someone else will pinch it and, to our detriment, make better use of it
Dawid Konotey-Ahulu
It gave the criteria used, what factors led to certain asset managers being brought forward and even a list of companies the fund said had strong environmental, social and governance credentials.
Richard Butcher, managing director at professional trustee company PTL, said independent trustees often share best practices even if they do not necessarily publish information.
“It sort of happens organically anyway. You have mechanisms… to share knowledge among the schemes,” he said.
However, he added it was less common among schemes themselves: “Schemes don’t do it per se, if only because there’s nowhere for them to do it.”
Feedback loop
Roger Mattingly, managing director at professional trustee company Pan Trustees, said information sharing was more prevalent in the public sector, but “in the private sector it’s a lot less structured”, relying on personal relationships and networking.
“A lot of us have been in the industry for so long that we know a lot of people and we share knowledge,” he said.
Schemes don’t do it per se, if only because there’s nowhere for them to do it
Richard Butcher, PTL
He added the industry would benefit from a “proper and comprehensive feedback mechanism” to facilitate the development of best practices.
“It’s in everybody’s interest to know what’s expected and suitable,” he said. “Whether it’s from public procurement or provider procurement, or the regulator.”
Mattingly added: “Striving for best practices is better achieved through constructive feedback [of] what was good and what wasn’t."
Dawid Konotey-Ahulu, co-chief executive at consultancy Redington and founder of industry social network Mallowstreet, said: “The only way you can really know whether you are running the pension scheme in the best way possible is by fearlessly testing that assumption against your peers and by receiving feedback from world-class advisers.”
He gave the example of a trustee whose investment committee believed it had a good understanding of risk, only to discover later their understanding was “scarily basic”.
Win-win
Konotey-Ahulu added schemes and experts sharing information benefited both sides of the exchange. Mallowstreet aims to help the industry share information and build relationships, he said.
“The industry boasts thousands of influential experts, but it also suffers from ‘silo siege’,” he said. “We live in boxes that impede the generous free flow of information and IP [intellectual property]."
"We often keep our kung fu to ourselves for fear that someone else will pinch it and, to our detriment, make better use of it.”
He added that such an approach is self-defeating and that it is better all round when IP and best practice are shared openly.
