Parting of the ways
Karel Noordzij, PGGM’s chairman, unexpectedly resigned at the beginning of March following an “irreconcilable difference of opinion” with the €71bn Dutch health care fund’s governing board.
He was at PGGM for just two years.
According to sources, there was an issue with Noordzij’s management style, which was regarded as too high profile for the scheme. PGGM declined to comment on this claim.
It is thought that the culture clash between Noordzij and the board of the fundcould spark an industry-wide discussion regarding the balance of power between the two parties.
Governing boards currently hold the reins of power in Dutch schemes – a factor that requires a specific management style by the executive chairman, said sources. The chairman needs to manage the demands of running a pension scheme, while also being sensitive to the demands of the board.
This can prove especially difficult for an executive chairman, who is an industry heavyweight and used to making the decisions.
Noordzij has been described by industry commentators as “high profile”, “very intelligent”, “used to being in command”, and certain about what he wants.
The need for large schemes such as PGGM to attract a good chairman coupled with powerful pension trustee boards can cause conflict, which is complex and difficult to resolve.
One industry source stated that this heightened conflict could form the basis for a debate on changing the structure of pension schemes in the Netherlands. According to a brief statement released by the scheme, the differences between Noordzij and the governing board arose over policy matters.
“It has been jointly decided to end the relationship between PGGM and Noordzij. Noordzij has consequently resigned as chairman of the executive directors,” said PGGM.
A spokesperson said the falling out “was not because of one single topic or fight”. Rather, it was due to issues of cooperation between Noordzij and the board of governors.
According to Dutch pension commentators, Noordzij’s announcement came out of the blue. “I am completely surprised,” said Pensioenfonds Metaal en Techniek director Bert van de Belt. He added he was unsure from where this conflict had arisen.
Meanwhile, the Dutch Social Affairs Ministry said: “Minister Aart Jan De Geus does not give any comment on Noordzij’s resignation. Noordzij’s resignation is a matter which concerns only PGGM.”
Until a successor to Noordzij has been appointed by the PGGM governing board, the remaining executive directors will perform his duties, with Heino van Essen as acting chairman.
Van Essen - appointed to PGGM in the late 1990s - is responsible for PGGM’s front and back office systems. Before joining PGGM, he was managing director of a Dutch hospital.
The other directors include René van de Kieft (finance and control director and responsible for compliance and supervision) and Else Bos (investment director, and responsible for asset management).
Noordzij took over from Dick de Beus as chairman of PGGM in 2004. He was former chairman and general manager of Dutch transport and logistics body Transport & Logistiek Nederland and director of Amsterdam’s Schiphol Airport. He was also formerly a director and interim chairman of the Dutch state-owned rail operator Nederlandse Spoorwegen for six months in 2002.
De Beus - at PGGM for roughly 25 years - has been described as “a walking dictionary” and “walking encyclopedia” on pensions and investments. He was very much in favour of consensus between parties, said one industry source.
De Beus resigned from PGGM in February 2004, and joined the board of asset manager F&C Management as an independent non-executive director.
Noordzij is due to receive a severance package worth more than €500,000. According to the PGGM spokesperson, “his severance pay is 24 months salary”. In 2004, he earned €255,000.
Financieel Dagblad reported Noordzij would receive the payment because his contract was broken off under exceptional circumstances.