Achieving Investment Excellence

PART OnePension Funds: Understanding the Role, Shaping the Mission

The basic question considered in Part I is the role and purpose of a pension fund, both in a generic and in a specific sense. This will be useful later in the book, as investing is the means for realizing the pension fund's purpose. We will also home in on the role of the board and its members. This is important, because throughout the book we will return time and time again to the critical role of the board in creating investment excellence. Fiduciary duty is important here, but there is also more; steering the fund strategically through a changing societal context, for example. Then we will move on to specific questions: How can you formulate a mission, a vision, and a strategy? How do you move towards your vision?

In this first part of the book we find ourselves firmly in the slow-moving, strategic part of the organizational loop. This is the part where the board sets the scene. Because in daily life, boards tend to spend a lot of time on the immediate issues at hand, it is not always easy to see this strategic layer.

Part I Topics Include:

• The role of a pension fund, and the roles of a board and its trustees;
• The meaning of fiduciary duty;
• How to formulate the mission, vision, and strategy of a pension fund;
• The importance of explicitly stating the strategic foundation of a fund in order to avoid confusion ...