Few would see an immediate parallel between the pension fund world and that of commercial aviation. Yet the story of the Douglas Corporation is interesting. Once the dominant commercial aircraft manufacturer, the firm had failed by 1967 when Lazard pulled the plug. Just as DB pension funds were in surplus at the end of the 1990s and had recovered most of their deficits by 2008, Douglas had an order backlog of over $3bn and a market-leading product in the DC9 when things went wrong. 

There are many explanations for the failure of Douglas but there seems to have been a classic misalignment between board strategy and the realities of the changing patterns in aviation in the 1960s. It is hard not to see parallels with the way many pension fund boards were preoccupied with details of manager track records in the 1990s and 2000s and failed to see the bigger picture.

Let’s be clear: no-one is suggesting that pension funds are about to fail en masse but prior success is no barrier to future failure and good governance is usually a key ingredient when things go well. 

Focus was one of the main missing ingredients mentioned by European pension professionals when we asked them what they thought trustee boards could do better. 

According to our respondents, the matter in hand is to identify the key, long-term issues, get them in the frame and then to stay focused on them at the expense of extraneous details. Our survey suggests positive change in the balance of time spent on various issues: almost a third said they now spend less time on the detail of return and asset manager-related issues while nearly two-thirds spend more time on broad risk-related issues. A majority have increased the time spent on liability, risk and investment-strategy issues.

It goes without saying that getting all these things right also involves getting the right people on your board. But assuming you can find them, how much should you pay them? Pretty much everyone recognises that expertise comes at a price and that this needs to be paid if funds are to meet their objectives. 

Perhaps the key question concerns the time spent on trustee board matters: most pension funds in our survey expect trustees to spend no more than two days a month on matters relating to the fund. The exact requirement will vary by fund but many outside observers are likely to conclude that this is very little. 

As national and supranational scrutiny of pension funds increases, requirements on schemes are likely to increase. It will be up to the industry to prove that it has its house in order.