For two days earlier this month over 80 board members, senior executives and investment professionals from 40 pension organizations in 12 different countries gathered at the University of Toronto’s Rotman School of Management.
The purpose was to examine and discuss five action steps investment institutions could take for the good of their own beneficiaries that would at the same time promote “the greater good” by fostering a more sustainable form of capitalism.
Among the actions was a call for a rethink of executive compensation practices as there seems to be no relationship currently between executive pay and performance. Another action call was to design and implement concentrated, long horizon investment mandates that require constructive investor engagement.
The workshop was organized by the Rotman International Centre for Pension Management (ICPM) and Generation Foundation, which is funded by Generation Investment Management founded by former U.S. Vice President Al Gore and investment banker David Blood.
The focus point for the workshop was a White Paper from Generation Foundation on “sustainable capitalism.” Gore kicked off the workshop with a review of the key messages from the White Paper.
“Pension organizations must walk the talk themselves if they are to be credible change agents,” says Keith Ambachtsheer, Rotman ICPM director and adjunct professor at the Rotman School. “For each of the steps they advocate for external organizations, they must be taking the same actions within their own organizations.”
Workshop participants also discussed three additional “actions” which included a recommendation that investors must address stranded asset risk resulting from the impact of climate change; initiate integrated reporting which combines material financial and non financial information in a single document; and a call to end the practice of providing quarterly earning guidance.
“One of the most helpful elements during the workshop was the healthy dose of skepticism about the value and feasibility of some of the proposed actions,” adds Ambachtsheer. “While all of the attendees may have not agreed on all aspects of the actions, the workshop did raise the collective understanding of what each of the five action steps were really about and how they might be best addressed.” Click here to access the Key Findings and Actions resulting from the workshop.
The mission of the Rotman ICPM is to be an internationally-recognized, high-impact catalyst for fostering effective pension design and management.