NETHERLANDS - Pension funds must regain their participants' trust before governance can be considered successful, according to the Pensions Federation in the Netherlands.
Speaking at the recent IIR conference on risk management, Gerard Riemen, the federation's director, said: "If trust is absent, all other efforts are casting pearls before swine."
According to Riemen, communication skills are crucial in this process.
"Board members should be frank with participants and also dare to ask each other critical questions," he said.
"These kind of things can't be regulated by law. One must simply behave accordingly."
In his opinion, pension funds should appoint more young and female participants to their boards for reasons of "support, quality and justice".
"If schemes don't act, they risk more bills for the representation of specific groups," he warned.
The federation's director also argued for extending social affairs minister Henk Kamp's still largely secret pension fund governance bill, with one and two-tier board models to the proposed parity and external models, "as both have already proven their usefulness".
He also said stakeholders in a pension fund must have a say in policymaking, rather than an independent supervisory board.
In the director's opinion, a pension fund's board members should not only have sufficient expertise and skills, but also affinity with a scheme's stakeholders.
"We must avoid remuneration issues, such as bank bonuses," he said.