Leadership, Collective Decision-Making, and Pension Fund Governance

30 Pages Posted: 14 May 2008

See all articles by Gordon L. Clark

Gordon L. Clark

Oxford University - Smith School of Enterprise and the Environment

Roger Urwin

Willis Towers Watson

Date Written: May 14, 2008

Abstract

For pension funds and other institutional investors, governance refers to the resources and processes used in decision-taking. Recognising that risk and uncertainty are the life-blood of investment strategy, in this paper we develop a resource-based framework to better understand the structure and management of financial decision-making in these organisations. It is suggested that these types of institutions have three types of scarce resources: time, expertise, and collective commitment (or how groups work together to a common purpose). We explain the nature of such decisions including their sensitivity to global financial markets; we explain the resource-based framework, and; we show how and why leadership in the decision-making process is essential to best-practice pension fund governance. To sustain the argument, we rely upon our best-practice governance framework and recent research on pension fund trustees' expressed opinions regarding their preferred styles of decision-making. Lessons are drawn for the process of collective deliberation and especially the role of board leadership and its distinctive qualities in best-practice organisations.

Keywords: Decision-making, pension institutions, financial markets, risk, uncertainty, pension governance

JEL Classification: G11, G15, G23

Suggested Citation

Clark, Gordon L. and Urwin, Roger, Leadership, Collective Decision-Making, and Pension Fund Governance (May 14, 2008). Available at SSRN: https://ssrn.com/abstract=1133015 or http://dx.doi.org/10.2139/ssrn.1133015

Gordon L. Clark (Contact Author)

Oxford University - Smith School of Enterprise and the Environment ( email )

South Parks Road
Oxford, OX1 3QY
United Kingdom
+44 1865 285197 (Phone)
+44 1865 285073 (Fax)

HOME PAGE: http://www.geog.ox.ac.uk/staff/glclark.html

Roger Urwin

Willis Towers Watson ( email )

875 Third Avenue
New York, NY 10022
United States

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