Pension funds trustees should adopt stakeholder approach

Pension funds trustees should adopt stakeholder approach

Staff Reporter

HARARE, Pension fund trustees must adopt a stakeholder approach to navigate the current business and economic realities in order to build long term value in a postCOVID-19 world as the pandemic has led to a global health and economic crisis that will have drastic short- and long-term impacts on organizations’ business models.

This can be done by assessing stakeholder impact, focusing on protecting stakeholder value and protecting membership communicating proactively.

Presenting at the Zimbabwe Association of Pension Funds Annual General Meeting  (AGM),EY   advisory  partner  Nqaba Mkwananzi  said there was also need to focus on trust to build Long Term Value although he said there  might be  potential areas of difficulties.

“Trust is achieved by putting include the diverse stakeholders of the company treated fairly, equitable and transparently. Plan administrators are subject to fiduciary duties and a duty of care in administration. The COVID-19 pandemic does not change this but likely creates practical difficulties in discharging the duties.  Here are some highlighted areas of difficulty. Conflict of interest, funding and contributions, pension fund investment, member communication and disclosure and administration practices and delegation,” he said.

He added that the board remains ultimately responsible for how the organization responds to business disruption over three horizons which are responding to the crisis as organizations focus on business continuity, crisis planning and potential macroeconomic impacts, managing a restricted business, leading through ongoing business disruption. Taking advantage of tactical opportunities and bouncing back from the challenges, building a resilient enterprise, reframing the future and transforming to succeed.

Mkwananzi said the COVID-19 pandemic highlights the need for effective risk and crisis management programs and trustees play a crucial oversight role given their collective experiences with other crises and overall business judgment.
“The Trustees must maintain clarity on the levers and impact of this disruption: Defining and living strong purpose that drives long term value, instilling a culture of continuous change and developing a future fit for workforce. In order to be considered effective, Boards’ crisis response must ensure enterprise resilience against the pandemic by: Providing appropriate support and guidance to senior executives with their immediate tactical responses.

Looking beyond BAU risks and focusing also on pandemic-related risks, such as cyber-attacks, workforce issues and competitive threats Identifying the transformative, long-term challenges and opportunities that will inevitably ensue The collective experience and wisdom of board members is critical in shaping how their organizations respond to the pandemic,” he said