The CFA Institute Centre for Financial Market Integrity today launched a code of conduct that aims to set out the ethical responsibilities for individuals who sit on the governing bodies of pension funds.

The Code of Conduct for Members of a Pension Scheme Governing Body, which sets forth 10 fundamental ethical responsibilities, is voluntary. The group says it kept the list of responsibilities high-level and principle-based, to address the primary ethical principles that a member of the governing body should follow, rather than prescribing the specific duties or detailed functions that a trustee should accomplish. It adds that the code is globally applicable and the principles outlined provide best practice regardless of where the pension scheme is formed or managed.

The working group that produced the code has strived to accommodate different types of pension schemes and standards into one global standard for ethical conduct that pension trustees should follow. The working group, led by the CFA Institute Centre, included representatives from The Council of Institutional Investors (U.S.), The Organization for Economic Co-operation and Development, National Association of Pension Funds (U.K.), Swiss Association of Pension Funds, Hong Kong Retirement Schemes Association, and Dutch Association of Industry-wide Pension Funds.

In July 2007, the CFA Institute Centre introduced the code at a meeting of the Organization of Economic Co-operation and Development Working Party on Private Pensions. In order to further strengthen the global application of the Code, the CFA Institute Centre solicited public comments, and it reports that many individuals and groups submitted comments and the working group incorporated these comments in producing the final version of the code.

Jon Stokes, director, standards of practice at the CFA Institute Centre for Financial Market Integrity, stated, “The conduct of those who govern pension schemes significantly impacts the lives of millions of people around the world who are dependent on pensions for their retirement income. Just as shareholders trust corporate directors to look out for their best interests in a corporate setting, trustees are charged with looking out for the interests of the participants in and beneficiaries of pension schemes. The code establishes just that through the provision of 10 fundamental ethical principles.”