Governance. The Evolution of a Financial Industry Word
Background
Over three decades ago when I set out to forge a career in the financial industry, governance, at least in my organisation, occupied an almost strangely contradictory position. On the one hand, I recall appreciating how vitally important corporate governance was, so important in fact that related discussions, debates and decisions seemed to take place almost in secret. Paradoxically, on the other hand, for something that was communicated as being this important, the function seemed to operate as a largely independent unit and didn’t appear to be integrated into asset class teams. This was the era of the Myners Report.
Later, as I reflect upon our industry’s evolution, I recall how governance also emerged alongside “environmental” and “social” as the tripartite investor consideration ESG. Arguably, it was somewhat carried along as the junior partner of the three, which has certainly been the case especially more recently as issues of sustainability have become an ever more pressing industry consideration. The era of the Paris Agreement one might observe.
Almost concurrently, governance was to be found seeping more broadly into the fabric of many investment organisations as two separate, but related units prefixed by the words “fund” and “investment”. This reflected an emerging industry consensus that oversight in both these areas required greater attention than had perhaps been afforded to them hitherto.
Fiduciary Management
It was around this time that a challenging career opportunity presented itself and I was catapulted into the Dutch pension fund environment. This coincided with the acceleration of an emerging revolution there, that of Fiduciary Management. I learned many things during this period, one of the most important being the vital role that independent oversight can play in effecting substantial positive change.
In this context, it is important to ask yourself three key questions:
Do I take time to understand…
my environment
my organisation
and myself!
If you are convinced that the answer to all these questions is yes, then look to a trusted source for a second opinion, for complacency is the enemy of success. Equally, the wind of change is blowing ever more quickly through our industry (you can read about that here).
During this latter period, the many interactions I had with Dutch pension professionals profoundly changed how I now rank the issues that are of importance to our industry. Previously I had been of the opinion that investment considerations ranked above all others, but no longer. It is now clear to me that sitting proudly on top of the pile of issues we in our industry need to pay attention to is Organisational Governance and now I am very fortunate to work every day alongside some of the people who helped shape this opinion, and others, at Avida International.
Paul Boerboon
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Bart Heenk
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Gerben Schreurs
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Simone Lavelle
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Rob Schreur
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Dorien ter Haar
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John Renkema
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Mike Weston
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Karen Heaven
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Phil Redding
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Chris Hitchen
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Dorothee Franzen
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Ian McKinlay
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Jenny Segal
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Pat Woods
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Beatrice Herrmann
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Sarah Smart
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Christian Schmitt
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Paul Boerboon 〰️ Bart Heenk 〰️ Gerben Schreurs 〰️ Simone Lavelle 〰️ Rob Schreur 〰️ Dorien ter Haar 〰️ John Renkema 〰️ Mike Weston 〰️ Karen Heaven 〰️ Phil Redding 〰️ Chris Hitchen 〰️ Dorothee Franzen 〰️ Ian McKinlay 〰️ Jenny Segal 〰️ Pat Woods 〰️ Beatrice Herrmann 〰️ Sarah Smart 〰️ Christian Schmitt 〰️
So, when, not if, you feel you and your organisation could benefit from interacting with a “critical friend” reach out and have a conversation with us.
