Article 20 October, 2021

Introducing ‘continuous governance’ – how we use technology and data to improve trustee governance

Revolutionising how we engage with pension scheme trustees.

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As we return to normal, we have a great opportunity to revolutionise how we engage with pension scheme trustees.

Virtual meetings have allowed us to continue business through the pandemic, and I would expect them to continue to some extent. We recognise the cost and time benefit of not asking everyone from around the country (or further afield) to collect in one room. When meeting in person, it made sense to run trustee meetings as an all-day affair, once a quarter. But with that approach came stale information representing but a moment in time. Static and out-of-date data points were the commonplace crux of trustee governance. With the rise of virtual meetings, most trustee groups have switched to shorter, more regular meetings. With these more regular meetings come the demand for up-to-date data–we call this ‘continuous governance’.

“With ‘continuous governance’ trustees can monitor their progress in real time and drive the conversation to what's important and relevant to them.”

With our latest technology roll-out, not only is pension scheme information up-to-date, it is interactive. For backwards-looking reporting, we show daily asset valuations and funding levels alongside the latest performance. We can break down the asset valuation to better understand its constituent parts and compare it to any other day to review its progression. Our interactive market performance and outlook tool brings meaning to movements in the assets and funding level. Trustees can take control and drive the conversation to what’s important and relevant to them. This live data ensures we focus the conversation on where we are now, and not where we were at the most recent quarter-end.

The daily funding level data (which is available online for trustees) provides an up-to-date view of the funding level progression. We can look at different funding bases, such as low dependency or buyout, and monitor in real-time against funding level triggers or buy-out market pricing. Trustees can see in real-time where they sit on their journey plan relative to their long-term objective. This is vital to identify potential de-risking opportunities as and when they arise and give them the ability to act.

With ESG and Climate Risk becoming more important on trustee agendas, having the data at their fingertips will allow trustee groups to understand their reporting and disclosure requirements. Trustee groups will be able to see how we integrate ESG and Climate Risk considerations into journey planning and investment strategy.

With all these tools we don’t have to follow the traditional quarterly meeting cycle. We’ve been engaging with clients at shorter, more regular meetings and it’s been widely appreciated by our clients.. Even as we move back to in-person meetings, the tools we have available bring meaningful information to the table. We can engage with clients as best suits them and aid decision making based on the latest data. All with achieving long-term funding and investment objectives at the centre stage. We therefore believe continuous governance is here to stay.

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