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Results Overview

Organisations were scored based on 35 questions across four components. The average country score was 71 out of a possible 100. This represented an increase of seven from last year’s average score of 64. The biggest Canadian public funds continued to be the leaders in governance disclosures, consistent with their reputation of excellent governance. Australia, Sweden, Denmark, the United Kingdom and Finland scores improved significantly as they made changes to improve their governance disclosures.

In last year’s review we noted that governance scores were most closely correlated with the overall score and posited that perhaps it was that case that as good governance produces positive results, it creates greater incentive (or perhaps less disincentive) to be transparent with stakeholders. There is evidence of a relationship between responsible investing and governance scores. Good governance allows funds to move beyond simply managing assets and towards addressing wider environmental and social issues.

The governance factor was assessed by looking at four criteria


1. Governance structure and mission.
Average country score: 85 (last year 77)

Scores for this component far exceeded those of any other three components with more than 75% of funds scoring greater than 80. Only the Mexican funds scoring less than 60 on average. The average score of 85 was an 8 point improvement from last year’s review.

High scores in this area should be expected as many of the items reviewed represent the bare minimum stakeholders should expect. Fortunately we observed almost universal disclosures (73 of 75 funds) of the following basic information:

  • An overview of the governance structure;
  • Disclosure of the names of the board of directors; and
  • Disclosure of all subcommittees subordinate to the main board.

It was heartening to see improvements in some areas from last year’s reviews:

  • 83% of funds reviewed now disclosed their mission statement, up from 69% in last year’s review.
  • Disclosures of conflict of interest policies and proxy voting policies also improved, in line with improvements in RI disclosures. There is still room for improvement, only 63% of funds disclosed their conflict of interest policies.

Scores in other areas were not as encouraging with basic disclosures far from universal:

  • 15% of funds did not disclose how or by whom board members were selected; and
  • Despite the almost universal disclosure of sub-committee names, only 85% of funds provided details on each committees’ responsibilities with only 78% listing the membership of each committee.

Many disclosures were commendable but there are some areas that need improvement including:

  • While most funds did disclose their governance structure, some disclosures were vague and unclear. These disclosures seemed to assume readers would be familiar with governance norms of the country. This seemed particularly true in countries where fund governance structure is quite tightly regulated.
  • Disclosures on the selection/election of board members were often quite vague and rarely talked about timing of past and/or future elections/selections. In addition, committee member start and end dates were often not disclosed, and if they were, start dates were far more common than end dates. In combination, it is hard for stakeholders to gauge how frequently the board turns over and evolves.
  • Although more than half of funds disclosed board policies around conflicts of interest, in some instances, the language was confusing and seemed uncommitted. A clearly written conflict of interest policy gives confidence and trust in a well-governed organisation.
    Questions relating to governance structure and mission
    • Is the overall governance structure for the fund outlined?
    • Does the fund have a clear mission statement identified as such?
    • Are all sub-committees listed?
    • Are the parties responsible and methods for selecting the board member outlined?
    • Are all the members of the board of directors named?
    • Are the sub committees that each member sits on documented?
    • Is the start date of each board member disclosed?
    • Is the end of each board member’s term disclosed?
    • Are the oversight responsibilities of the board and each sub committee available for view, or at least a detailed summary?
    • Is the board’s conflict of interest policy detailed as well as how real or apparent conflicts are dealt with?
    • Are the fund’s processes for monitoring portfolio companies, including proxy voting policies disclosed?

    2. Board competencies and qualifications.
    Average country score: 41 (last year 36)

    Disclosure of board competencies and qualifications continued to disappoint, despite an improvement in the average score from 36 to 41. Canada continued to be the only country to score above 80. South Africa joined the United Kingdom and Australia as the only other countries to score above 60 in this area.  

    Disclosure of board member experience and relevant qualifications continued to be the only area in which most funds reviewed received a positive score. Despite more funds disclosing this information this year (60% vs. 55% in last year’s review), the result is still very disappointing for what should be a basic disclosure.  

    It was pleasing to see increased disclosure prevalence in some areas, including:

    • An increase in the number of funds that disclosed board education policies. Prevalence was still low at 36% of funds globally, but nonetheless a marked improvement from last year when only 21% of funds made such disclosures; and
    • 28% of funds saw fit to disclose desired board competencies, up from only 17% of funds last year. Still only 9% of funds saw fit to compare and contrast desired competencies with those actually possessed by current board members, an improvement from a very low 5% of funds in last year’s review.

    It goes without saying that there continues to ample room for organisations to improve including the items below which all saw disclosures from less than half the funds reviewed:

    • The use of plain language to describe the skills and qualifications of board members and how they are relevant to the oversight of the fund;
    • Demonstrating a commitment to having a knowledgeable, well qualified board by disclosing actual versus desired board member competencies, continuing education initiatives and board review processes; and
    • Holding board members accountable by disclosing board member attendance at both the full board and for any subcommittees.
      Questions relating to board competencies and qualification
      • Are board members experience and relevant qualifications listed?
      • Are the desired competencies of the board of directors listed?
      • Are actual board member competencies contrasted against desired competencies?
      • Are changes to the governance process and/or structure (if any) in the prior year discussed?
      • Are continuing education policies for board members documented?
      • Are board effectiveness reviews discussed?
      • Are the number of meetings of the board and each subcommittee documented?
      • Is the attendance record of each member of the board recorded?
      • Is the attendance record of each member of a sub committee documented?

      3. Compensation, HR and organisation.
      Average country score: 51 (last year 44)

      Compensation, human resource and organisational information disclosure continued to display the highest variability across countries of any component. The overall average score of 51 was an improvement from last year’s score of 44. Four countries had scores of 75 or above. Conversely there were also four countries that scored less than 25 in this area.

      Salary disclosure continued to be the biggest factor leading to differences in scores across the countries reviewed, with little change observed year over year:

      • In four countries, all five funds disclosed board member compensation, in three others, none of the five funds did; and
      • In two countries, all five funds disclosed total compensation for the CEO and their top two reports, in six others, none of the five funds disclosed management salary information.

      Disclosures in most areas improved year over year, with a couple of notable improvements:

      • Slightly more than half of the funds reviewed now disclosed the processes and/or philosophies used to determine board compensation. We observed such disclosures at 53% of funds reviewed this year, up from 39% of funds last year.
      • The focus on diversity is growing globally and two-thirds of all funds made disclosures about employee diversity programs. In all countries, at least one fund reported on their diversity programs. Last year only 51% of funds reviewed disclosed their diversity policies. 

      Recognising that disclosure of actual remuneration may be a difficult sell in countries where it is not required, there are still several areas where compensation, HR and organisation disclosures could be improved:

      • Many disclosures on board compensation philosophy were quite vague. It would be good to see more disclosures around time commitments and peer groups used to determine board compensation.
      • Disclosures around management compensation philosophy are more insightful if they provide clear details on how variable compensation is aligned with stakeholder outcomes. Better still if the relevant organisational results are disclosed along with actual management remuneration to demonstrate that compensation philosophy is being followed in practice. Only 13% of funds reviewed provided such disclosures.
        Questions relating to compensation, HR and organisation
        • Are processes and/or philosophies for determining compensation for management disclosed?
        • Are processes and/or philosophies for determining compensation for the board disclosed?
        • Is compensation for board members shown?
        • Are the names and titles of the CEO and top four direct reports available?
        • Is total compensation for the CEO and the two next highest comped management members disclosed individually?
        • Is variable compensation for the CEO and the two next highest comped management members disclosed separately?
        • Were details provided on how actual management compensation was determined with reference to actual fund results?
        • Is the total organisational headcount disclosed?
        • Are the fund’s employment diversity policies listed?
        • Is the fund’s total headcount disclosed by gender?

        4. Organisational strategy.
        Average country score: 71 (last year 63)

        The items scored under this component were heavily revised from last year. The focus now being on corporate goals and results as well as disclosures of the management of both financial and non-financial risk factors. In last year’s review these items were covered in other sections.

        Overall the results were positive with an average score of 71, which represents and increase from a restated score of 63:

        • 96% of all funds disclosed investment/ financial risk management governance policies and practices.
        • Disclosure of non-investment risks was lower, with 81% of funds doing so. For the most part these disclosures were detailed and fulsome, with many funds dedicating entire sections of annual reports or policy documents on risk management for both investment and non-investment risk.

        What funds can do better:

        • While more funds are making disclosures of overall corporate strategy, many still focus almost entirely on investment matters. Much like traditional corporations in other industries, asset owners’ corporate strategy extends beyond their core mission. Stakeholders are interested and deserve insight into corporate direction and plans. Examples could include plans to in-source certain functions, development of a new website or member portal, or perhaps human resource initiatives. A review of progress in the prior year is good, disclosure of strategies for the following 3-5 years, even better.
        • Measuring corporate achievements against corporate goals in a quantitative way. For the 65% of funds that discussed their goals for their previous year, less than half of those funds measured them quantitatively. Discussions on corporate strategy do not hold as strong a weight if they are not benchmarked and compared against a measurable standard.
          Questions relating to organisational strategy
          • Are investment/financial risk management governance, policies and practices discussed? 
          • Are non-investment risk factors and related policies and practices discussed? (e.g. regulatory/legislative, reputational, operations, cyber-security)
          • Are the fund’s corporate goals, other than investment matters, discussed for the previous year?
          • Are the fund’s corporate goals, other than investment matters, for the following year discussed?
          • Are corporate achievements, other than investment matters, contrasted against corporate goals in a quantitative way?

          To view all questions to each component, visit the Methodology page here.

          Average score

          Highest score

          Governance questions asked

          Overall Results Governance.

          Year-on-Year Comparison

          Governance Ranking





          5.United Kingdom


          South Africa

          8.The Netherlands





          13.United States



          “If you don’t know where you are going, any road will get you there.”

          Lewis Carroll in Alice’s Adventures in Wonderland


          The assessment of governance and organisation disclosures included 35 total questions organised across the four components outlined below. Some revisions have been made to the questions informed by observations from last year’s review.

          Questions around the philosophy and mix of internal/external and active/passive management were moved from the governance and organisation factor to performance. Questions around management governance of both investment and non-investment risks, previously part of the performance factor are now included in governance and organisation. These changes reflect that these items were more often observed alongside other information within the respective factors. Two questions were removed since they were similar to questions from the cost factor and there was not sufficient differentiation in results last year to warrant retaining. Additional questions were added in a couple of areas to allow for additional granularity of scoring where it was observed that several funds likely deserved partial marks based in last year’s scoring.

          Annual reports usually contained much of the information, with much of that information mirrored or supplemented on websites. Occasionally, some disclosures were found in other documents such as: codes of ethics; corporate governance/stewardship guidelines; and investment policy statements.

          1. Governance structure and mission (40% of governance and organisation factor score)
          Effective stewardship of large pools of assets requires a robust governance structure with a clearly articulated mission. While assessing the quality of the governance structures in place is beyond the scope of the project, certain information is required for stakeholders to do any form of appraisal. Is the overall governance framework outlined including all committees and subcommittees responsible for overseeing management? Are the respective responsibilities of these bodies clearly articulated? Are the individuals who serve on these bodies identified along with how long they have served in their roles?

          2. Board competencies and qualifications (20% of governance and organisation factor score)
          A governance structure is only as effective as the combined skills and experiences of the individuals involved. Desired skills and competencies should be identified and disclosed, as should the actual skills and competencies of current directors and committee members. Governance structures and processes should evolve to meet changing needs. Disclosure of changes to process and structures, board effectiveness reviews, and continuing education endeavors signal an organisation with a governance structure that is dynamic and evolving. Unlike the ongoing nature of management, boards and committees convene only a finite number of times per year. The number of board and committee meetings along with member attendance should be disclosed.

          3. Compensation, HR and organisation (25% of governance and organisation factor score)
          Effective compensation policies should allow the attraction of skilled individuals and help drive and reward desirable behaviors. The processes and philosophies on how compensation is determined for both the board and senior management should be disclosed. Disclosure of actual compensation for the board, the CEO, and the management team is a demonstration that these processes are being followed. Better still if actual management variable compensation is justified with quantitative comparisons to organisational results. Statements of diversity demonstrate that an organisation is focused on all aspects of employee wellbeing. Total staff headcount and compensation lend insights into the structure of an organisation. Total staff headcount split by gender lends insights into the structure of an organisation and reinforces a commitment to diversity.

          4. Organisational strategy (15% of governance and organisation factor score)
          Disclosing overall organisational strategy beyond simple investment strategy, both for the past year as well as the future, demonstrates an integrated approach to management and allows stakeholders a more fulsome view. Detailed qualitative disclosures of the processes to manage risks, both investment and non-investment, provides valuable insights on the durability of organisational success.