June 20, 2013
TORONTO, ON – 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 International Centre for Pension Management (Rotman ICPM) is to be an internationally-recognized, high-impact catalyst for fostering effective pension design and management. Its four primary tools to achieve this goal are the funding of objective and transformative research, the organization of interactive, action-oriented discussion forums, the publication of a readable journal relevant to professionals in the pensions and related fields, and the delivery of the globe’s leading governance education program for Board members of pension and other long-horizon investment institutions. Further details on the Centre, including access to the Rotman Journal of International Pension Management, are available at www.rotman.utoronto.ca/icpm/.
The Rotman School of Management at the University of Toronto is redesigning business education for the 21st century with a curriculum based on Integrative Thinking. Located in the world’s most diverse city, the Rotman School fosters a new way to think that enables the design of creative business solutions. The School is currently raising $200 million to ensure Canada has the world-class business school it deserves. For more information, visit www.rotman.utoronto.ca.
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