Pension Funds as active agents of sound corporate governance

by Gosego January, CEO of Debswana Pension Fund

The Corporate Governance theme is by no means a new one in many fields, and certainly not in that of finance or pension funds. The Financial Services Sector has always been at the forefront of spearheading robust Corporate Governance initiatives, ensuring compliance and competence beyond bare minimum standards. In many ways, the words “pension fund” and “governance” are synonymous with each other, for Pension Funds operate with due expectation and requirement of strong corporate governance standards. 

Why, one may wonder, need the standard be set so high? Because Pension Funds are not only responsible for ensuring commensurate returns for their members but are also tasked with providing greater socio-economic impacts for society, holding substantial assets that have  the power to transform both communities and country. Members can and must therefore hold the Funds to account when it comes to higher standards and levels of professional excellence. Ask yourself: would you trust your retirement future to be in the hands of an organisation without an impeccable reputation or appreciation of the very fundamentals of good corporate governance? I certainly hope not; nor should you ever have to ponder the question.

The public has every right to zone in on the core qualities of an organisation that has their future in their custody, and to take a keen and curious interest in ensuring they understand the standards of governance being practised by their pension partner. This is what we strive to do for our own members at Debswana Pension Fund.

Debswana Pension Fund represents12,466 Members with Assets Under Management of BWP 10 billion as at December 2021.That is 12,466 members, their dependents and families notwithstanding,12,466 lives and futures. What this speaks to is influence – great influence. With great influence comes great responsibility, as a twist in the famous saying would have it. Pension Funds must always be responsible and accountable in meeting the retirement needs of Members with due process and governance, balancing expertise and insight with positive influence. 

So how is this influence actively channelled to both do good by our members and to uphold and actively shape high Corporate Governance standards? Debswana Pension Fund aims to be an active agent of socioeconomic change and progress while ensuring that the structures in which member assets are managed are robust, transparent, and sustainable. It is not enough to simply comply; we must lead. 

To this end, we have ensured we implement a sound Corporate Governance framework by, at a minimum, adhering to global standards such as the King IV Code. By embracing the King IV code, Debswana Pension Fund ensures the right characteristics or behaviours (Discipline, Transparency, Independence, Accountability, Responsibility, Fairness, and Social Responsibility) and compliance management standards. Widely viewed as a leader in the pension fund industry in Botswana, the Fund has adopted global best practices in member communications, governance, monitoring of outsourced functions and leadership. Testament to this is our having received international awards in recognition of effective and efficient Member communication strategies​, investment and strategy, legal and technical compliance, risk management and general governance compliance. 

As an institutional investor, we have a great responsibility to develop the market and strengthen the Corporate Governance framework.  This is an integral focus of the Fund Board of Trustees and Management. All matters of the Fund are taken through stringent governance structures for decision-making, guided by approved governance frameworks and policies. These procedures help ensure that the Fund always delivers superior and sustainable returns to members. The Fund is prudent with investments, strategic in approach, and well-aligned to the mutual long-term gain of investing responsibly, with consideration of environmental, social and governance themes. Initiatives in this vein have enabled us to grow over the years with a strong trajectory and indeed a positive outlook. 

We have been able to create substantial value for our members and continue to impact the country significantly through various investments. We are always continuously asking ourselves the hard questions, setting ever-more stringent levels of acceptance and excellence, and ensuring a culture of compliance and best practice is self-perpetuated rather than simply accepted. This is how we contribute to propel Botswana as a centre of excellence. As I said, the Corporate Governance theme is by no means a new one; how we embrace and leverage it for progress, however, is what matters most.