The World Economic Forum, the group that organises the annual Davos meeting of political and business leaders, has called for an international set of pension governance principles.
The forum, along with the UK’s AccountAbility, has put together nine recommendations to improve the relationship between pension funds and corporate governance.
“The greatest impediment to the ability of pension plans to reflect the inherently long-term investment horizon of their participants is perhaps the one most deeply embedded in their own architecture,” the group said in a 62-page report called ‘Mainstreaming Responsible Investment’.
“Most funds fail to meet the bedrock governance standards they increasingly demand of companies. This can most clearly be seen in the principal ways in which accountability and transparency fall short.”
It said savers normally have “no voice” in how the funds operate or who makes key fund decisions. “Corporate funds and employee stock plans in many jurisdictions are entirely or largely controlled by company management.”
“Boards of trustees of pension schemes generally do not operate as professional oversight bodies.