Why have an independent trustee?
A well chosen independent trustee can bring:
- A high level of relevant expertise
- Sensitive independence in dealings with employer related issues
- Reassurance to members, fellow trustees, executives and Regulator
- A strong focus on good governance .
The use of independent trustees has become the norm amongst well run trustee bodies who are interested in good governance.
Incidence is also growing: in a 2008 survey 44% of schemes have them, compared to 35% a year before. There is growing regulatory pressure for trustees to take a strong position in all dealings with the sponsoring employer and an independent voice is invaluable in ensuring this, relieving executives from the difficult conflicts that can arise. Specific guidance from the Pensions Regulator now requires all trustees to recognise and manage conflicts of interest proactively.
A well chosen independent trustee can bring considerable additional expertise to the table and support the trustee body in ensuring the high level of knowledge that is expected in today’s regulatory environment. Member nominated trustees often look to an independent trustee for the comfort of knowing the trustees are acting properly on complex matters where employer interests could influence considerations.