Do you know where your fund stands governance wise?

"It has always been acknowledged that there is nothing glamorous about good governance. At a corporate level, asset managers are known to put a premium of up to 20% on the existence of good governance structures within a company. Members of a retirement fund would no doubt do the same," says John Kotze, Head of Old Mutual Actuaries and Consultants.

Assess for yourself! Is your Fund's governance sinking your fund or helping it float on air?

This self-assessment questionnaire aims to illustrate that good governance is not as elusive as one may think, that it is not costly to implement and that the value-add can be appreciable.

Circle the answer that is most accurate for your Fund.

Q1   Does your Fund have a documented Code of Conduct, signed by all Trustees, against which the Trustees' management of the Fund is assessed?

1. NO
2. Yes, but it is not used actively
3. No, but our internal governances and controls are strong
4. yes, and it has made a difference to the management of our Fund

Q2   What steps have your Trustees taken to learn about their duties and responsibilities as a Trustee, and grow their knowledge on an ongoing basis?

1. Attending basic trustee training; attending trustee meetings with 'on-the-job learning'
2. Basic trustee training; attending and participating in trustee meetings
3. Upfront and ongoing trustee training; attending and participating in trustee meetings
4. Upfront and ongoing trustee training; preparing for, attending and actively participating in trustee meetings; review of relevant media

Q3   Does your Fund have an Investment Policy Statement (IPS)?

1. No
2. No, but we are about to implement one OR Yes, but we have not reviewed it in the last 3 years
3. Yes, and we do review investment performance relative to the IPS at least annually
4. Yes, and it is used actively, driving regular reviews

Q4   Does your Fund have a Risk Benefit Policy Statement (RBPS)?

1. No
2. No, but we are about to implement one OR Yes, but we have not reviewed it in the last 3 years
3. Yes, we review risk benefits relative to the RBPS at least every 2 years
4. Yes, and it is used actively, driving regular annual reviews

Q5   How effictively does your Fund communicate issues such as benefit structures, changes, investment performance etc?

1. There is a member booklet and members get annual benefit statements
2. (1) + members have access to all relevant fund reports and rules through internal intranets
3. (2) + regular member newsletters that aim to make complex issues easier to understand
4. (3) + members are encouraged/afforded access to appropriate personal financial advice

Q6   When last did you go out to tender for your administration and consulting services?

1. Not for the last 10 years
2. Not for the last 5 years
3. Not for the last 3-5 years (mainly to allow for surplus process to run its course)
4. We have a defined process that sees these services tendered for every 3 years, at least

Q7   How rigorously do you assess service provider deliveries relative to service level agreements?

1. Rely on report-backs at trustee meetings
2. Rely on service providers to keep us informed on a regular basis
3. Principal Officer plays an active role monitoring service delivery
4. Measurements / milestones have been defined for all key deliveries, and are actively monitored and reported

Q8   What steps do the Trustees take to ensure that thre are no conflicts?

1. Limited
2. Trustees and service providers required to make declaration of any potential conflicts at the start of each Trustee meeting
3. (2) + potential conflicts are checked with each significant decision; a gifts policy/register is kept
4. (3) + separate service providers are selected for key services and/or formal disclosure of incentives are obtained to ensure that no conflicts exist, Principal Officer does not work for a service provider

Q9   When last did you check whether your level of fidelity cover was sufficient?

1. What is "fidelity cover"? OR I don't know!
2. Not for the last 5-10 years
3. Not for the last 3-5 years
4. We have a defined process. This is reviewed every 2 years, at least

Q10  How much of your Fund management is proactive and happens by design?

1. Trustee meetings are low on the company agenda and are regularly postponed for lack of a quorum
2. We have delegated this role to our consultants, who define the agenda and suggest the appropriate actions, which the Trustees rubber-stamp
3. Trustees actively apply their mind to issues and, while consultants guide, Trustees own the decisions and define the actions
4. There is a formal calendar of events defined before the start of each year against which actions/agendas are defined and active measurement occurs; formal planning occurs with each new event

To find out more, please contact: John Kotze on 021 509 5392 / jkotze@oidmutual.com or Craig Aitchison on 011 217 1681 / caitchison@oldmutual.com

This questionnaire has been designed by Old Mutual Actuaries and Consultants.