Achieving Investment Excellence

Appendix B

HOW TO DEVELOP STRATEGIC GOALS

Strategy is about delivering the goals that you have established. This requires an evaluation of the external environment in which the pension fund operates and a review of the fund's current position—is it fit for purpose? The aim of such a review is to enable the board to identify the factors important for success in the market, its own strengths and weaknesses as well as those of the competition  (see Exhibit B.1).

EXHIBIT B.1 Steps for developing strategy.

In this appendix, we will take you through the steps of the process. As an introduction, we provide you with some do's and don'ts about the way you could organize the process:

1. The board is responsible for setting the strategy. The board can be assisted and facilitated, but strategy formulation cannot be delegated.
2. Depending on the personalities and the history of the board, the strategy formulation process can be very intense. Arranging external help with these boardroom dynamics could therefore be worthwhile.
3. A collective effort has a greater chance of ending up as a collectively supported strategy.
4. Organize outside-in views, and avoid tunnel vision and complacency. You can use all kinds of players to do this, ranging from peers to consultants. It's important not to get stuck in your own box.
5. Involve stakeholders. In order to get a good view of your position, you could involve ...