The relationship between consultants and trustees must become more candid and challenging if real improvements are to be made, according to Redington director of strategy Paul Richards.
Speaking at the PLSA Investment Conference, Richards said consultants are often reluctant to offer constructive feedback to clients for fear of damaging the relationship.
"The ability to give real developmental feedback is missing in the current trustee/adviser relationship and it is incredibly important," he said. "I feel that while the industry has made great strides in improving governance, it is often around process as it is easy to say when you think a process doesn't work. However, it is harder when it comes to looking at the trustee board itself as you don't want to alienate the client."
Royal Mail Pensions Trustees chief executive Chris Hogg agreed this is an issue that needs to be addressed: "There is an issue around consultants giving honest feedback," he said. "Consultants have a lot of experience that needs to be utilised. I'm not suggesting it is easy but it is an issue that needs to be dealt with as we need to be making more of the relationship than we currently do."
Richards discussed an approach called radical candour and said the relationship between trustees, trustee chairpersons and consultants should operate in a similar way to schools, head teachers and governors. While the board of governors is there to support the head teacher and school they are also there to challenge where necessary.
"It needs to be done in a respectful manner and with the best interests of the scheme at heart," he said. "If we can enshrine such a process into how we work then that would be great."
He added that gaining the support of the trustee chairperson is vital to implementing such an approach.
"It is important that you find the right person to talk to but with a solid framework, good intentions and a bit of bravery then we can hopefully improve outcomes for schemes."
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