Trustee Leadership Forum
The Trustee Leadership Forum for Retirement Security (TLF) is an applied research collaboration with labor-affiliated trustees of public and Taft-Hartley pension funds, with implications for stakeholders across investment markets. The project draws on the experiences of these trustees to identify the core issues they face in developing strategies for long-term sustainable wealth creation – how they grapple with and react to the role that portfolio theory, fiduciary duty, agency issues among trustees, staff, consultants, legal advisors and fund managers, and challenges to the very idea of defined benefit pension plans.
The project, framed in the context of leadership and organizational studies, focuses on the role that pension fund trustees play in designing and overseeing the development of responsible investment strategies at the their funds. We conduct participatory action research with a self-defined group of labor-affiliated pension fund trustees, and solicit input from a group of related stakeholders including academics, fund lawyers, investment consultants, fund managers, and others.
The goal of the TLF is to support systematic thinking about responsible investment by trustees, in the service of long-term pension fund sustainability. This project takes shape in the wake of the financial crisis, and the political and economic fallout the crisis engendered. Responsible investment is treated here as one piece of a larger effort to shore up retirement security through a variety of channels and initiatives.
Interested in participating?
Contact Erin Shackelford at firstname.lastname@example.org or by phone at 617.495.3837 for more information on the different ways you can engage.
Below is a collection of growing resources that features original works from the TLF alongside suggested readings and is organized by issue area. Resources developed by the TLF are the product of information gathered from convenings with trustees and independent research. We will continue to add new materials, as they become available on retirement security and responsible investment. As an introductory reading to the work of the TLF and its inception, read a paper submitted to the UNPRI Academic Conference in September 2011 by IRI Director, David Wood and Senior Fellow, Jay Youngdahl: Initial lessons from the TLF.
- A Note on Trustee Leadership, TLF
A summary of trustee thoughts on what it means to be a trustee leader compiled from convenings of the Trustee Leadership Forum for Retirement Security.
- Seven Attributes of Highly Effective Pension Fund Trustees, TLF
This power point presentation was developed by members of the Working Group of the Trustee Leadership Forum for Retirement Security exploring the question of what it means to be a “trustee leader.”
- Seven Attributes One-Page Summary, TLF
This is a one page summary of the power point presentation “Seven Attributes of Highly Effective Pension Trustees” which explores the question of what it means to be a “trustee leader”.
- Pension Investing Principles, TLF
Ideas from Dennak Murphy, a labor organizer who acted as a stakeholder liaison to CalPERS for many years, on leadership principles for trustees.
- Best Practices for Trustees and Pension Systems by Chris Waddell for AFSCME, 2009
- A Note on Investment Fees, TLF
As fees have grown, investments have grown more complex and opaque, forcing trustees to consider whether their investment options have been designed to maximize fees rather than investment returns. This short piece by the TLF summarizes why trustees may be interested in putting a strategic focus on fees, and what they can do to address fees at within their own funds.
- International Approaches to Fees: A Brief Overview and Resources, TLF
This brief overview summarizes different approaches that have been developed internationally in response to exorbitant fees charged to investors.
- A Note on Short-Termism, TLF (2016)
Short-termism, “the focus on short time horizons by both corporate managers and financial markets,” poses significant risks both at a portfolio level and to the wider economy. This note outlines the barriers to long-term investing faced by pension funds as well as opportunities for trustees leaders to support a long-term investment strategy.
- A Note on the 2015 DOL Guidance on ETIs and ESG, TLF (2016)
This one-pager details the three main takeaways for trustees from the new DOL guidance on Economically Targeted Investments, or ETIs.
- The Cambridge Handbook of Institutional Investment and Fiduciary Duty, Cambridge University Press
” . . . a comprehensive reference work exploring recent changes and future trends in the principles that govern institutional investors and fiduciaries. A wide range of contributors offer new perspectives on dynamics that drive the current emphasis on short-term investment returns.” Includes pieces by IRI Founding Director, Steve Lydenberg and IRI Senior Fellow, Jay Youngdahl.
- Fiduciary Duty of Investment Intermediaries, UK Law Commission
From the UK Law Commission, this 2014 report answers a request that the Law Commission “consider how fiduciary duties currently apply to those working in financial markets, and to clarify how far those who invest on behalf of others may take account of factors such as social and environmental impact and ethical standards.”
- Is It Always About the Money? Pension Trustees’ Duties When Setting an Investment Strategy, UK Law Commission
This short document summarizes the [UK] Law Commission’s conclusions on these issues [duties of pension trustees].” An accessible, bullet pointed summary for trustees.
- A Legal Framework for the Integration of Environmental, Social and Governance Issues into Institutional Investment, produced for the UNEP Finance Initiative by Freshfields, Bruckhaus, Deringer
Produced by Freshfields, Bruckhaus, Deringer for the Asset Management Working Group of the UNEP Finance Initiative to answer the question “Is the integration of environmental, social and governance issues into investment policy (including asset allocation, portfolio construction and stock-picking or bond-picking) voluntarily permitted, legally required or hampered by law and regulation; primarily as regards public and private pension funds, secondarily as regardsinsurance company reserves and mutual funds?” This work addresses the legal case in several countries, including the US.
- Protecting Our Best Interests: Rediscovering Fiduciary Duty, Share Action
In March 2011 ShareAction published a major report on investors’ legal obligations to the people whose money they manage.
- The Prudent Trustee: The Evolution of the Long-Term Investor, The Generation Foundation
“This paper presents an overview of the evolution of the concept of the “Prudent Man”, makes the case for long-term investing, begins to identify long-term risks and rewards fiduciaries or their investment managers must consider when investing over the long-term, addresses several questions regarding the legality of considering sustainability issues within an investment context, and concludes by discussing the importance of aligning the interests of the investment manager with the asset owners.” By Jed Emerson and Tim Little for The Generation Foundation
- The Time Has Come For a Sustainable Theory of Fiduciary Duty in Investment, Hofstra Labor & Employment Law Journal
“The way trust investments are managed is important for the long-term health of the beneficiaries and the long-term health of society. Legal definitions of the prudent fiduciary duty in investment should not constrain the ability of trustees to adequately provide for the well being of the beneficiaries of their trust.” By IRI Senior Fellow Jay Youngdahl.
- The Use and Abuse of Labor’s Capital, New York University Law Review 2106 (2014); Boston Univ. School of Law, Public Law Research Paper No. 14-7
This “. . . Article focuses on the use of public pensions to fund privatization of public employee jobs. Under the ascendant — and flawed — interpretation of the fiduciary duty of loyalty, public pension trustees owe their allegiance to the fund itself, rather than to the fund’s participants and beneficiaries, notwithstanding the fact that the duty of loyalty commands trustees to invest “solely in the interest of the participants and beneficiaries” according to ERISA and similar state pension codes.” By Boston University Law School Professor David Webber.
- Reclaiming Fiduciary Duty Balance, Rotman International Journal of Pension Management, Fall 2011. “This evolution of fiduciary duty demonstrates that fiduciary law is not a static concept, nor is it tied to a single investment theory. Rather, it is a flexible set of principles that have been subject to varying interpretations over time.” By James Hawley, Keith Johnson and Ed Waitzer
- A Note on Income Inequality, TLF
A short piece, summarizing how income inequality affects labor’s pension funds and retirement security.
- Fast Food Failure: How CEO-to-Worker Pay Disparity Undermines the Industry and the Overall Economy, Catherine Ruetschlin, Demos
Policy think tank Demos examines CEO-to-Worker compensation ratios by industry and finds extreme income inequality in U.S. accommodation and food services, particularly in fast food, which appears to pose financial risks for those firms and their investors.
- The Price of Inequality, Joseph Stiglitz
Nobel Laureate and noted economist Joseph Stiglitz’s book on income inequality lays out the history and causes of the current income inequality crisis, the costs of this growing gap, and proposes policy solutions.
- The Rise (and Likely Fall) of the Talent Economy, by Roger L. Martin, Harvard Business Review
This paper discusses how the economy has moved from valuing labor to valuing financial returns, and how stock-based incentives have encouraged short-termism and created an unsustainable inequality of income at the expense of workers. The author calls for three changes, including calling on pension funds to stop supporting stock-based compensation and not supplying hedge funds with large amounts of capital.
- Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens, Martin Gilens and Benjamin I. Page, Perspectives on Politics
This statistical analysis, by professors from Princeton and Northwestern Universities, examines the impact of income inequality on policy in the United States, and concludes that “economic elites have far more independent impact upon policy change than the preferences of ordinary citizens” and that in our current political system, the majority no longer rules, money does.
- Focus on Inequality and Growth – December 2014, OECD
This four page brief summarizes the findings of new research by the Organization for Economic Co-Operation and Development showing that when income inequality rises, economic growth falls.
- Investment Beliefs Statements, a working paper by IRI Founder, Steve Lydenberg
Questions for Trustees to Ask
- Questions and Red Flags for Trustees, TLF
Put together by AFSCME, and based on conversation from the May 2012 convening of the TLF, this concise cheat sheet gives trustees a list of questions to ask their managers about investment opportunities as well as comments or statements they should be wary of.
- 13 Questions Trustees Can ask about Hedge Funds, TLF
- Questions Trustees Can Ask Fund Staff and Consultants About Potential Private Equity Investments, TLF
Diversity and Inclusion
- TLF Diversity and Inclusion Reading List 2015
- The Business Case for Racial Equity, Altarum Institute and the W. K. Kellogg Foundation, October 24, 2013
- The Inclusion Imperative: How Real Inclusion Creates Better Business and Builds Better Societies, by Stephen Frost
- The Costly Business of Discrimination, by Crosby Burns, Center for American Progress, March 2012
- The Cost of Employee Turnover Due Solely to Unfairness in the Workplace, by The Level Playing Field Institute, 2007
- The Bottom Line: Corporate Performance and Women’s Representation on Boards, Catalyst, 2007
- Investment Manager Diversity: The Hardest Taboo to Break, by Emmett D. Carson, Silicon Valley Community Foundation and Michael Miller, Managing Director, Colonial Consulting, LLC
- Who Manages the Money? How Foundations Should Democratize Capital: A Case Study of the W K Kellogg Foundation, by Thurman V. White, Jr in cooperation with ABFE: A Philanthropic Partnership for Black Communities
- ABFE’s Resource List for Foundations Seeking Diverse Managers
The Business Case for Good Jobs
- Why “Good Jobs” Are Good for Retailers, by Zeynep Ton, Harvard Business Review
- Human Capital Management Coalition Toolkit
- Human Capital Management Coalition Questions
Too Big To Fail Banks
- Note on Too Big to Fail Banks, TLF
- Too Big To Fail: Risk-Return Considerations for Pension Trustees, TLF Webinar Slides
- Too Big to Fail: Risk-Return Considerations for Pension Trustees, TLF Webinar Recording(1 hr 6 min)
- 5th National Convening, June 2015
- 4th National Convening, June 2014
- 3rd National Convening, June 2013
- 2nd National Convening, May 2012
- 1st National Convening, May 2011
- Chicago, IL: August 2014
- Dayton, OH: March 2014
- Ft. Lauderdale, FL: January 2013
- Chicago, IL: December 2012
- Columbus, OH: August 2012
- Los Angeles, CA: November 2011
- Sparking More and Better Infrastructure Investments, December 2015
- Good Jobs, Good Investments, May 2015
- Private Equity at Work with Eileen Appelbaum and Rosemary Batt, November 2014
- Hedge Funds: The Implications of the CalPERS Decision for Pension Fund Trustees, October 2014
- Fees and Institutional Investors: The HESTA Model, June 2014
- Income Inequality and Potential Risk to Investors, May 2014