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.