Let’s give pensions leaders the chance to lead

Jan the Dutchman

Jan the Dutchman

I was speaking yesterday with Jan the Dutchman. He used to be the investment Director of one of the largest Dutch pension funds.

When he decided to make a strategic policy decision such as introducing LDI or floating off the asset management function, he would go to his boss. His boss would say yes or no and things would proceed with the usual checks and balances you get in a well-governed organisation.

Jan’s point was that he was given the opportunity to innovate because he was trusted to deliver.

He spoke with me about the absence of leadership he saw in the UK. He told me that when he talked to large organisations in the UK , he rarely could identify a decision maker. Matters were referred to governance committees and then got lost in the long grass.

No leadership=no ownership=no decisions.

I was at a thought leadership event yesterday at NEST. Collectively we listened to a number of presentations and group sessions. All were of a high standard , delivered by experts in their field and many had great ideas in them.

But Jan’s point applied. There was no-one in the room who seemed to be asking “how could I do that with my plan?”

There seems to be a separation , which is most unfortunate, between thought leaders and proposition managers. Proposition managers appear to be driven by financial returns and thought leaders driven by such nefarious objectives as “improving member outcomes”. Decisions when they are taken seem to be outsourced to the financial strategy teams of the biggest consultancies.
Occasionally , as with the extroadinary partnership between Adrian Boulding and Tony Filbin at L&G, thought leadership and proposition management work together and I am struck here by the fact that both Adrian and Tony have been able to lead their respective business units for some time without disruption. I am also struck by how they back themselves in everything they do.

These strong stable management teams which provide continuous leadership over time are the business equivalents of Man Utd or Arsenal. There are other examples that we could look at and I’d be interested in any views on other successful leadership teams that have delivered over time because of the autonomy they have achieved as leaders.

Weak leadership in business leads to things not getting done, innovation being kicked into the long grass and a general failure of entrepreneurial activity. I fear that too many organisations within the financial services community are now taking their strategy from management consultants and not empowering their own leaders.

Over the next 7 years, the political agenda will switch from cost-reduction to growth. Where there is discretionary spend , it will be ideas that deliver growth in the economy that will get it. Let’s hope that this will be mirrored in industry and particularly in the pensions industry so that some of the ambitious ideas that we discuss today can turn into reality.

My friend Jan is an entrepreneur, he has the gleam of gold in his eye but that gold is as much about making things good for his customers as good for his shareholders. We don’t see eye to eye on some things (strangely he is no fan of the Dutch system of collective DC) but we share that drive for change and for innovation delivered.

I asked him whether he thought the Dutch pension system superior to the UK’s and he laughed “of course it is, it delivers better outcomes”.

I suspect that Jan and I meet in the middle and I quipped that maybe this was a case of “the other man’s grass was always greener”.

We could agree that a fundamental reason the Dutch run pensions better than us is because their leadership and governance structures actually work.

This post first appeared in http://www.pensionplaypen.com and can also be found here

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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1 Response to Let’s give pensions leaders the chance to lead

  1. Mike Atkin says:

    In the main we have 2 forms of governance. Trustees for trust based schemes and governance committees for GPPs.With the legacy mindset of company sponsorship relative to defined benefit it is very rarely in the remit of governors or trustees to make substantial improvements unless they are supported by an infuencial company representative. Companies will only make substantial improvements to serve their own ends ie strengthen recruitment or the like. The senior staff will generally be well catered for seperately from the masses and most will have little interest in pushing the company on behalf of their underlings.Add to that that Governers/trustees are obliged to get proffessional advice at every step and will be loathe to stray from that advice in order to cover their arses. Then add to that that the advice is generally fairly safe and uncontroversial – to cover their arses and there you have Mr Dutch. Steady inertia.

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