NBPSPP & Stewardship
Is the Board of NBPSPP (the New Brunswick civil service pension plan) a good steward of the plan's assets. Over the last couple of weeks, areas of some concern in the plan's oversight and management have been raised. The term "stewardship" has been thrown out, but without a definition.So , what is stewardship and how might one know that a board is an effective steward?
Stewardship is about fulfilling the Board's responsibility in growing the Plan's assets entrusted to it.
The key characteristics to ensure growth include:
- a plan making it resilient to crises;
- a plan ensuring that growth is value driven;
- structures and processes providing Vestcor with a clarity of purpose;
- strategic.
To be an effective steward of the assets consigned to its care, a Board needs , first , to be informed both about the assets and the needs of the plan's members. Any decisions that the board makes needs to be substantiated. To do this , properly, the Board members need to know:
- the purpose of the plan;
- its own core values;
- its capabilities. That is the abilities of each board member and each committee;
- the plan's risk profile;
- the characteristic which define the plan's membership.
Further, the Board needs to be able to communicate clearly with the key stakeholders as well as the individual members. All need to know what process to accomplish this, is.
Board leadership is critical. We would expect that the Chairman:
- can assure us that the composition of the board is capable of reaching its targets;
- ensures that the board and its members have sufficient preparation to accomplish these objectives;
- can assure us that the board has the appropriate capabilities to accomplish its work; and that the Board chair has a process to replace any under-performing board member.
To demonstrate effective stewardship, the Board should have policies which address:
- Board effectiveness
- board-staff relationships (in this case the management of Vestcor)
- Governance processes
Key documents might include:
- Board member skill profile
- Performance feedback forms ( committee leadership, members)
- Board Chair review form
- Board Chair Skill Profile
- Board profile process
- Board Committee structure
- Committee Terms of Reference
- Compensation grid for Vestcor
- An organizational (aka Plan) sustainability profile.
