Vocabularies of Motive and Temporal Perspectives: Examples of Pension Fund Engagement and Disengagement

Abstract

Prior research on institutional investors’ role in corporate governance draws a distinction between engaged and disengaged pension funds. The aim of this study was to shed more light on how pension fund practitioners talk about engagement and disengagement. Using insights from 35 in‐depth, semi‐structured interviews and round‐table discussions with pension fund trustees, executives, investment officers and financial intermediaries, we identify different types of vocabularies and temporal perspectives used to account for different stances towards engagement. We highlight a tension between a seemingly causal relationship between accounts and future behaviour and argue that these ‘accounts’, ‘vocabularies’ and ‘uses of the past’ in themselves need to be treated as an object of study because they may represent not simply the individual motivations but rather the expressions of extant norms in the broader social context of financial markets. An important policy implication is that perceived realities of investment are unlikely to cause a change in pension fund behaviour because participants seem to decouple their view of the world from their impact on the world.

Appearance or substance of Stewardship and ESG reporting? The challenges of translating ‘commitment’ into tangible outcomes

“…For example, Haack et al (2012) argued that narratives that co-evolve with the dispersal and embedding of CSR standards can shed light on whether a formally adopted practice becomes filled with meaning beyond just “written words” and become gradually accepted, understood and enacted as the “natural way of doing things” within organisations. This is something I have also observed in the context of institutional investors and their engagement (Tilba and Wilson, 2017). Furthermore, trustees of more engaged pension funds interpreted their fiduciary duty to include not only narrow financial interests but also broader ESG issues (Tilba and Reisberg, 2019).…”

“…In the UK, SAMPJ 13,5 MacNeil and Li (2006) also reveal that investors would tolerate non-compliance with governance codes of best practice as long as this non-compliance does not affect the share price, indicating only profit-maximising incentives. Tilba and McNulty (2013) and Tilba and Wilson (2017) discovered that investment fund manager reporting to their pension fund clients is mostly retrospective and that most pension funds did not actively seek to engage with their fund managers on ESG issuesit is simply assumed that stewardship and engagement happens at that level. How it happens and what outcomes this engagement brings, however, remains unclear.…”

“…In the context of CSR reporting, Christensen et al (2013) were more positive in arguing that even superficial CSR “talk” can result in social change even when organisations do not fully live up to their aspirations. Whilst exploring vocabularies of motive of UK pension fund trustees, Tilba and Wilson (2017) found that a few UK pension funds that had a more optimistic and positive narrative connected to the long term were more engaged vis-à-vis their investee companies on ESG issues. At the same time, these authors also found that a majority of pension funds used negative narratives of pension deficits, which resulted in short-term investment profit generation, above all else.…”

Rise of the Androids: The Reflection of Developers’ Characteristics in Computerized Systems

“…Interview studies have often involved similar numbers of participants (e.g. Stoian, Dimitratos and Plakoyiannaki, 2018; Tilba and Wilson, 2017).…”

Impact of Board Composition on Pension De‐risking Strategies

“…Since the market is relatively new and data on transactions are limited, there is little empirical literature focusing on pension buy‐ins and buy‐outs. Given that the longevity risk is one of the largest pension risks faced by DB pension plans (Tilba and Wilson, 2017), other research (Biffis and Blake, 2009; Blake et al ., 2008) explores pension buy‐ins and buy‐outs to investigate how employers transfer mortality risk to insurance companies via this insurance contract.…”