SWITZERLAND - While Dutch pension funds have seen an improvement in corporate governance in recent years, there is still too little professionalism, according to former Philips pension fund chief executive Dick Snijders.

“If low professionalism on the boards of many pension funds continues, wrong choices will continue to be made,” he said.

Speaking at the fifth annual Institutional Fund Market meeting in Geneva, Snijders also stated that the new IFRS accounting rules prohibiting funds from keeping a long-term vision was among the biggest threats facing corporate governance.

“A CFO has to preserve his balance sheet,” he said.

Former Watson Wyatt partner Sue Douse, chairing the discussion, stated that Snijders’ findings showed that the widespread idea that Dutch funds were largely professionally managed was not necessarily true.

Corporate governance issues in the Netherlands were initially taken up in the 1990s by the Peters committee, and later the Dutch corporate governance foundation SCGOP (Stichting Corporate Governance Onderzoek voor Pensioenfondsen).

This followed problems including vague governance, low transparency and accountability, and “weak” communication, said Snijders.

The DNB also formulated various criteria for pension fund board members, including integrity and competence on an individual and collective basis.

Snijders stated that while there have been improvements, complicating factors today are diversity in nature and scale, and that pension schemes get more individual elements. There is also the issue of competition and the need for more level playing fields.

“The most basic idea is that good governance adds value, and is not a nuisance,” he said.