Corporate Officers Reluctant to Serve on Fiduciary Committees

Employee Benefit News, reports that HR managers face challenges in attracting and retaining the best employees to serve on fiduciary committees.  Potential committee members are concerned when they learn that fiduciary responsibilities open them up to personal liability for breaches of conduct.

Simply put, who needs that headache?  Even when indemnification is provided, being a defendant in a lawsuit is not what people what people bargained for when accepting the “honor” of serving on a fiduciary committee.  Years after the settlement of a lawsuit, a Google search will reveal this nugget of a committee members professional history.

These concerns are justified.  However, the hidden and unspoken concern is that many plan sponsors lack the infra-structure to support this fiduciary responsibility.  Without a doubt, the most important component of this infra-structure is the culture of fiduciary integrity.  Does the organization value the fiduciary obligations and the processes required to support these fiduciary roles?

Corporate officers may often feel that they cannot turn down appointment to  these committees — declining such a high profile committee assignment could be career-limiting.  Anyone who feels such pressure should take this as the “canary in the coal mine”, that possibly their organization neither understands nor respects the importance of these roles.

Anyone nominated to serve on a fiduciary committee should have an opportunity to ask questions about the role and the opportunity to decline.  Asking questions about a position reflects the very prudence required for the position.  At a minimum, the fiduciary candidate should ask the following questions:

1.  What does the role entail and why have I been selected?

2.  What professional staff will be available to assist and suport the committee?

3.  What training will I receive?

4.  How much time will I need to devote to this and how will it impact my other responsibilities?

5.  Can I review the charter of the committee as well as the fiduciary policies and procedures?

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