Trustees and pension fund managers have been urged to ensure they are “singing from the same hymn sheet” and draw up codes of conduct governing the receipt of gifts and how to handle placement agent fees.
Howard Sherman, head of corporate governance product development at MSCI, told the current issue of IPE there was the temptation for asset managers “to do whatever it takes” to win clients.
He said it was therefore important for pension trustees and management staff to know whether gifts needed to be disclosed to ensure decisions were “based on merit”.
Barry Mack, partner and head of governance at Hymans Robertson, agreed with Sherman’s assessment and called for a code of conduct be drawn up for each fund.
“There may already be a tacit consensus as to what constitutes appropriate behaviour, but, until something is written down, pension fund staff may actually not be all singing from the same hymn sheet,” he said.
“If you’re invited to something you couldn’t afford yourself, there is clearly a risk of undue influence. Therefore, you probably shouldn’t accept it.”
However, the Hymans Robertson partner added that there would be different levels of affordability depending on the pay grade of the affected employee, meaning this would need to be taken into account.
Their comments come in the wake of a number of governance scandals across Europe, including most recently the resignation of Keva managing director Merja Ailus.
In the wake of her resignation last year, the Finnish government published details of a new law for disclosure of potential conflicts of interest.
Problems have also occurred in other countries, including in Switzerland.
Michael Valentine, investment consultant at Towers Watson in Zurich, said it made sense for pension funds to check whenever there was uncertainty that their current protection was “adequate”.
For more on codes of conduct, see the current issue of IPE magazine
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