The search for the balanced trustee body

I have spent a lot of time recently considering the question of what is a balanced trustee body.

As an actuary at Mazars I am privileged to work with individuals across a number of disciplines, including those of behavioural science, accountancy, tax, insolvency and the making of great coffee (do not underestimate the skill of my colleagues in the latter group.)

When I joined Mazars in September 2011 I made a point of talking to as many people as I could, with a view to sharing skills and establishing whether we could develop products that would be bigger than the sum of our two parts. I found two goldmines, one of which was Board Polarities.

The principle of Board Polarities is simple. When a number of individuals come together as a group to make decisions and then implement those decisions, they are often asked to exhibit conflicting behaviours, or strategies. The theory of polarities says that a “balanced group” will make “balanced” decisions within these pressures and so exhibit good governance as a group.

This struck chords with me, given the Pension Regulator’s focus on governance, and my own belief that good governance is the route to good outcomes. The Mazars model identifies five conflicting behaviours or strategies. A score is given to each five of the conflicting behaviours, with the ideal position being neutral on all five – the “perfect” balanced board.

My team’s challenge was to map these behaviours on to scheme trustees. Interestingly, the fit was pretty instant. The assessment, made up of around 80 questions that trustees answer individually also translated well onto the pension scheme model.

So how does it work? All trustees answer around 80 questions, answers being on a scale of 1 to 5. This takes about 30 minutes per trustee. The results are collated and presented for the trustee group as a whole. The range of answers is also provided which gives an interesting insight into a trustee board’s coherence in view. The interesting point about the exercise is that it draws out issues in governance, which lead on to discussions about risk appetite, strategy, behaviours and the practical ability to achieve the funding strategy that the scheme actuary has set. All pretty fundamental stuff.

Interestingly for me, I am yet to meet the perfectly “balanced trustee” and am not sure, really whether they exist.

So the question remains: Does the “balanced trustee” exist? And would a trustee body work any better if they achieved that elusive score. I’m interested to hear from Trustees who would like to trial the model for free.

Please let me know.

Taking your team on tour

Checking my email and diary this week I noticed an invitation to sing with yet another high profile “cross over” classical singer. If anyone knows me they will know that I have a background in classical music and, having spent a couple of years performing on a full time basis and running my own classical music “cross over” group, I now occasionally get asked to “gig” on these events. Having joined Mazars I’m now slowing down and just doing the “big ones” and running a global pensions business 😉 Yes, laugh, I did too…..but it’s a nice place to be.

So, why mention this? Why is it relevant to pensions? And why would anyone else want to listen to my musings of the music industry….? Well, the thing that I didn’t realise back in 2004 when I was sitting in a studio in Brick Lane, trying to get Mike Batt to promote my recent album, was just how much of the work I was doing then was parallel to how we pitch for business and market our services now in pensions. They say that the music business leads the rest of the field and, having been there, there is something in that.

So what are my thoughts? What did I learn in the “toughest industry in the business” and is Simon Cowell really worth his salt?

So firstly, let’s compare the products. Music…Easily accessible, very disposable and very dependent on how the person generating the product looks. Pensions….Not very accessible, totally not disposable and, actually if you can do the job, nobody gives a monkeys how glamorous you are.

So what are the parallels? The fact is, the sales process is the same.

  • You need an album, i.e. USP. Get in the studio and record your pitch. You need to know what your pitch is and also why are you that better than everyone else. Then you need to tweak how it sounds? 
  • Once you have an album, get in rehearsal. You need to be able to give that concert in front of any prospect that may come your way. You need to rehearse it, know which band members will play each part and deliver, unconditionally, whenever you need to. 
  • The pensions industry is like music in that there are about 10 well tested and successful chord progressions that everyone trades on and makes a fortune out of. It’s a standard product but it’s the production around your chord progressions that matters, and the marketing. People buy people, and like in music industry, if a client clicks with you and loves you they will buy.