NSFM Fiduciary Duty Consultation Paper

Keith Johnson writes: The NSFM in person meetings on 7 March in London and 9 March in Amsterdam included presentation of a public consultation paper on Reclaiming Fiduciary Duty. That paper is now posted [here] for broader NSFM participant and public comment. It builds on prior work of the NSFM Fiduciary Duty Working Group and is part of a larger project to develop key performance indicators for fiduciaries. That project is being undertaken by NSFM participants James Hawley, Ed Waitzer and Keith Johnson for the Rotman International Centre for Pension Management at the University of Toronto.

The consultation draft examines market and pension sustainability issues associated with the duty of impartiality, an often overlooked but fundamental fiduciary responsibility. It also explores how economic changes over the past half century have turned the fiduciary duty of prudence into a dangerous lemming standard that undermines the traditional duty of loyalty. Pension fund governance and service provider chain conflicts of interests are also evaluated under a rebalanced fiduciary duty analysis.

Comments on the paper and development of key performance indicators are invited and may be submitted to kjohnson@reinhartlaw.com.