Discretion is the better part of valour- they used to say. Then along came social media and discretion is not the kind of word that you use when you only have 140 characters at your disposal.
Some thought that the Financial Times was the upholder of the old values- some thought wrong. When Lucy Kellaway attacked the corporate nonsense emanating unchecked from the lips of a Global CEO, the CEO’s Public Relations guru thought it a good idea to remind her that her victim was an (advertising) client.
Kellaway, who is no respecter of veiled threats, went in with two feet and just about every media somebody now wants a bit of the action. This includes the FT’s pension paper Pensions Expert which decided to canvass opinion on the value of biting the hand that feeds, from a bunch of pension luminaries.
Unsurprisingly, Pensions Week and the pension luminaries thought it a bad idea to upset the service providers who they employed since there were “sensitivities”. Just what these sensitivities might be was not made clear, but we can be pretty sure that the dividing line between amateur trustee and service provider is pretty clear. That’s why large employers have pension managers – to curb excess through proper scheme management.
In the old days, when Trustees protected the interests of members and the balance of costs was picked up by a corporate sponsor (or council tax-payer), the conflicts of interest were less pronounced. One might expect a corporate sponsor to exercise some control over the purchasing of trustees and audit pension scheme costs with a weather-eye for value for money.
But this relates to defined benefit schemes where pension costs appeared as footnote on the overall scheme deficit. Mal-administration, poor investment performance and unaudited transaction costs could all be lost in the wash.
But things ought to be different in a defined contribution world. For one thing, it is the member, not the employer, picking up the cost; for another, the trustee – or as likely the independent governance committee member is probably serving a number of masters.
In recent blogs, I have emphasised the need for IGCs to be clear in its objectives.
An independent governance committee is here to serve the policyholders, not the insurance company.
Social media’s fault?
The tenor of the Pensions Expert article was directly opposed to social media. Social media is a threat not just to the Chairs of IGCs but to the conventional media with which it competes for “eyeballs”.
I have found that the FT has always been most enlightened when it comes to working with bloggers (like me). I thought that the spirit of Lucy Kellaway- fiercely independent of any advertising or other interest that might conflict with the paper’s integrity – was in the spirit of independence that make those who tweet, blog and post – tweet blog and post.
I consider their piece misses the point. Good journalism does not have any truck with statements like these.
Roger Mattingly, director at professional trustee company Pan Trustees, says transparency around what companies are good to work with is useful, but said there is a “sensitivity” when it comes to public criticism.
“It could be quite damaging,” he said
Good journalism aims to seek out the truth, not the convenient fable. Trustees of DC schemes have a duty of care directly to their members. Trustees of DB schemes are struggling to keep schemes solvent, should their schemes become insolvent, they risk not just the full benefit of the scheme, but the livelihoods of the employer’s workforce and the capital of any shareholder.
There are no “sensitivities” that come before probity of behaviour. We cannot tolerate imperfection when perfection is the target. If we do not aspire to an ideal world, what is our target?