Four qualities of effective retirement fund trustees:
Focus on good governance. In upholding good governance, trustees need to ensure that conflicts of interest are avoided and the independence of services providers such as auditors is maintained. Much of the media noise surrounding the Steinhoff and KPMG scandals related to the independence (or lack thereof) of the auditors. Generally, the auditors of a retirement fund are appointed, directly or indirectly, by the fund’s administrator. Raising ethical issues on the auditors’ part could easily be seen as biting the hand that feeds them.
Thoroughness. If they are not careful, trustees may become accustomed to routine procedures and may not check things such as auditor reports as thoroughly and rigorously as they should.
Record keeping and communication. Section 7D of the Pension Funds Act states that “further duties of the board shall be to ensure that proper registers, books and records of the operations of the fund are kept, inclusive of proper of all resolutions passed by the board”. Although many fund members are not aware of this requirement, trustees should be. A good trustee will hold their board to this, and ensure that members are adequately communicated with as well.
Ongoing learning. “Appointing trustees is all about empowerment,” says Jacobus Troveri. “As we well know, the job is very complicated and truly demanding. If a board takes its role seriously, it should invest in the appropriate skills and on-going training to ensure that decision-makers feel empowered to do what they need to. This is something that is very close to our board’s heart and a key item that we regularly embark upon.”