Reclaiming Fiduciary Duty Balance

Document Type

Article

Publication Date

2011

Source Publication

Rotman International Journal of Pension Management. Volume 4, Issue 2 (2011), p. 4-17.

Keywords

Fiduciary Duty; Impartiality; Modern Portfolio Theory; Pension Fund; Risk Management

Abstract

Fundamental fiduciary principles have survived intact for centuries, yet their interpretation has been dynamic. Given changes over the past few decades in global economic, capital management, and market structures, we appear to be at another inflection point in the understanding of fiduciary principles. Years of focus on the fiduciary duty of prudence has generated myopic investment herding behaviors, undermined intergenerational pension equity, and disrupted attention to the fiduciary duties of loyalty and impartiality. Reclaiming fiduciary duty balance between prudence, loyalty and impartiality is critical to sustaining pension promises. It would encourage better alignment of pension service providers’ supply chain interests, adoption of fit-for-purpose pension fund governance practices, and implementation of precautionary risk management policies.

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Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 4.0 License.

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