Effective Labour Representation on Pension Bodies

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Effective Labour Representation on Pension Bodies

• Johanna Weststar and Anil Verma
• June, 2005

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RATIONALE CONTEXT

• Economic significance of pension funds
• Movement toward better governance, socially
  responsible investment (SRI) and plan member
  involvement
• Increased labour representation on pension boards
  through collective bargaining and government
  legislation

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LABOUR AGENDA
SRI, ETI, Proxy Voting
More unions are reaching the first level But some
do not wish to
Full Participation in Decision-making
Most trustees barely accomplish the second level
let alone proceed to the next
A Seat on the Board
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RELEVANT RESEARCH
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THEORETICAL MODEL
Personal Resources
Board Trustee Performance
Effective Labour Representation on the Board
Organizational Resources
Social Resources
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METHODOLOGY

• Step One
• Interviews with labour reps and others
• Large Public Plans OP Trust, OMERS as well as
  CLC, FTQ and CP Rail
• Step Two
• Survey of labour trustees across Canada
• Paper version and web versions
• N99

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FINDINGS PERSONAL

• Prior Knowledge and Learning Curve
• What do union people know about stocks and
  bonds? It is another universeIts a very very
  very steep learning curve. Ive never had such a
  steep learning curve. And it is always there.
• Time Commitment and Self Study
• Large binders on short notice
• Considerable individual preparatory time

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FINDINGS ORGANIZATIONAL

• Lack of adequate training
• Not enough courses
• Courses from financial perspective
• Limited trustee ? union contact
• Low priority for union
• Low accountability to the union
• Dont need to spend time training workers to
  become mini-capitalists

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FINDINGS SOCIAL

• Limited Support Networks
• Often many contacts within the union
• Less contacts within the financial or pension
  world
• Limited contact with other labour trustees
• Conflicting roles and social identity
• Prudence and fiduciary responsibility
• Labour trustee in the middle

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FIDUCIARY RESPONSIBILITY

• says you will act in the best interests of the
  pension plan and in saying that a lot of trustees
  will then lose their role as a union
  representative.
• Because there is this collegial atmosphere,
  there tends to be less challenging and when you
  interject with a union perspective into that sort
  of milieu, if you seem too overt they can always
  fall back on the notion that you are not
  following your fiduciary responsibility.

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CONCLUSIONS

• Increased resources will help labour trustees in
  their role
• More rigorous selection processes
• Training beyond an introductory course with a
  financial perspective
• Training in a labour perspective
• Network for support and independent advice
• Better linkages to the union

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THANK YOUQuestions and Comments
Welcomewww.pensionsatwork.ca

• Johanna Weststar and Anil Verma
• June, 2005