Sean Kidney writes: Fiduciary duty for a pension trustee is about protecting the financial interests of fund members in the long term. Or, in the language of the pensions world, “maximizing risk-adjusted returns over the long term, consistent with the interests of participants”. Why then do pension funds spend more time looking at the trees rather than at the forest?
Jonathan Hayward writes: Accountants say, quite correctly, that the legally required purpose of audit is to give an opinion on financial statements prepared in accordance with accounting standards. Much of the rest of society thinks (and not unreasonably) that audit should contribute more to economic stability by helping to communicate something about the risks inherent in a company’s business model and how they are managed. For decades, this “expectation gap” has not merely remained unclosed but has widened.
Frank Jan de Graaf writes: Most leading economists - including Ben Bernanke, chairman of the US Central Bank - believe that money creation can solve budget deficits by increasing liquidity. I think this works only in the short term. In the long term, loss of solvency is the real risk because it can lead to loss of trust: investors are afraid they will not get their money back. This in turn increases the risk of stagnation, inflation, and ultimately, economic downturn. Money creation merely fuels debt addiction, adding to the risk of insolvency.
Penny Shepherd writes: Following the financial crisis, investment practices will not remain static. There are strong underlying pressures for change, even if restrained so far by barriers to entry and customer apathy.
Mike Krzus writes: How many of today’s reform initiatives—whether in the US, UK, EU or somewhere else—are in reality focused on preventing yesterday’s crisis? Financial market reform should concentrate on creating an environment that supports a sustainable economy.
NSFM participant and member of the coordinating team, Frank Jan de Graf, has co-authored a paper which appears in the prestigious Institutional Investor Article Collection. Together with his co-author Alfred Slager, CIO of the Stork Pension Fund, he argues that RI movement needs to focus less on what it traditionally focusesd on - namely ethical screening, best-in-class portfolios & thematic fund - and should focus more on collaborative
Hazel Henderson writes: Today, over 60% of all trading on Wall Street exchanges is done by computers - all programmed to compete to get the fastest execution of their trades at the best price. Each trade generates a commission so the most trades make the most money. The latest "innovation" is "high-frequency" or "flash" trading, where the computer programs run so fast that they can trade stocks, bonds or commodities thousands of times per minute. These computers are so fast that they can "see" other orders in line before they are actually traded. This allows bonanza pro
Frank Curtiss writes: Current changes to the UK stewardship regime offer asset owners in the UK and elsewhere the opportunity to shape the landscape of responsible share ownership. As someone who has worked in the pensions sector for more than 20 years, I believe it is time that asset owners took a clear leadership role in the stewardship debate. Specifically I call on pension funds exposed to "UK Plc" - that means funds inside and outside the UK - to endorse publicly the new UK Stewardship Code.