Governance Extends to Funds, Says Panel
Pensions & Investments reported on recommendations issued by a a committee of the Stanford Institutional Investors’ Forum at Stanford Law School for improving the governance of pension, endowment, and charitable funds.
“Funds should 1) clearly define and make publicly available their governance rules; 2) mandate tough and transparent policies to address conflicts of interest; 3) take steps to ensure funds have trustees who are competent in financial and accounting matters; 4) establish clear reporting authority between trustees and staff; and 5) define appropriate responsibilities and delegation of duties among fund trustees, staff and outside consultants, according to a statement from Stanford. The 31-page report is available at www.law.stanford.edu/clapmanreport.
“What we don't want is a future Sarbanes-Oxley for investment funds,” Peter Clapman, chairman of the committee, said in the statement. Mr. Clapman is also CEO of Governance for Owners USA, a shareholder activist advisory firm.
The study “should be a welcome addition to the emerging body of literature on crafting good business models for public employee retirement systems,” Gary W. Findlay, executive director of the $7.6 billion Missouri State Employees’ Retirement System, Jefferson City, said. “Reinforcement from a credible academic source will likely be embraced by those in the industry who are attempting to professionalize their operations.” Mr. Findlay was not involved in the study.