Plan Beneficiaries Depend on Fiduciary Good Conduct

By 2020-12-18February 9th, 2021No Comments

There are 694,000 retirement plans, and 2.2 million health plans covering over 143 million workers in the US. As fiduciaries, we must remember that they depend on us to act in their best interest at all times. In a time when more workers are retiring, proper corporate governance is increasingly important.

A recent article in the HarvardLaw 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:

  • 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 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. The Fi360 Prudent Practices® can help guide fiduciaries in this area. Following the practices can reduce costs, risks and may offer improved and/or less volatile results. Implementing best practices can go a long way to assuring employees that their employers are focussing on being good fiduciaries.