Pension Fund Board Governance and Asset Allocation: Evidence from Switzerland

45 Pages Posted: 6 Mar 2019

See all articles by Nadège Bregnard

Nadège Bregnard

University of Neuchatel

Carolina Salva

University of Neuchatel

Date Written: January 15, 2019

Abstract

We study whether pension fund board governance relates to asset allocation and show that well-governed boards have greater international diversification and lower cash holdings. In particular, boards that establish comprehensive investment policies invest more in risky assets, in foreign assets and hold less cash. These results are consistent with prudent behavior and can be explained by the limits that a comprehensive investment policy puts on the liability of trustees and by the financial expertise embedded in the process. Also, the presence of external financial experts is associated with greater diversification but their role in lowering cash holdings is limited.

Keywords: Pension Funds, Board Governance, Asset Allocation, Switzerland

JEL Classification: G11, G20, G23

Suggested Citation

Bregnard, Nadège and Salva, Carolina, Pension Fund Board Governance and Asset Allocation: Evidence from Switzerland (January 15, 2019). Available at SSRN: https://ssrn.com/abstract=3334950 or http://dx.doi.org/10.2139/ssrn.3334950

Nadège Bregnard

University of Neuchatel ( email )

Switzerland

Carolina Salva (Contact Author)

University of Neuchatel ( email )

AL Breguet 2
CH-2000 Neuchatel
Switzerland

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