I have shared a number of posts that focus on what it means to be a good fiduciary. As the reader may recall, a Fiduciary is “an individual in whom another has placed the utmost trust and confidence to manage and protect property or money. The relationship wherein one person has an obligation to act for another’s benefit.” Each of us, in our own way, must remember that we only have custody of our assets and it is our responsibility to pass them along in better condition than we received them.
A recent article in the Harvard Law School Forum titled “Global and Regional Trends in Corporate Governance for 2017” by Jack “Rusty” O’Kelley III and Anthony Goodman, Russell Reynolds Associates, offered the following issues for corporate governance. I argue that these trends reflect a growing awareness of our roles as fiduciaries:
* Increasing expectations around the oversight role of the board, to include greater oversight of strategy and scenario planning, investor engagement, and executive succession planning.
* Continued focus on board refreshment and composition, with particular attention being paid to directors’ skill profiles, the currency of directors’ knowledge, director overboarding, diversity, and robust mechanisms for board refreshment that go beyond box-ticking exercises.
* Greater scrutiny of company plans for sustained value creation, as concerns increase that activist settlements and other market forces are causing short-term priorities to compromise long-term interests.
* Greater focus on Environmental, Social and Governance (ESG) issues, and in particular those related to climate change and sustainability, as industries beyond the extractive sector begin to feel investor pressure in this area.
To these points I add having a better handle on the risks and rewards of employee health and retirement plans. Diogenes spouses global best practices to help guide fiduciaries in this area, practices that reduce costs, risks and offered improved, less volatile results. Implementing best practices can go a long way to assuring employees that their employers are focussing on being good fiduciaries.