Acting in the Best Interests?

Our future well-being is dependent on a small number of people who look after our pension savings and other investments. But are they acting in our best interests? 

We funded The Cass Business School and FairPensions to run a 12 month seminar series to examine whether investors' fiduciary duties to the people whose money they manage are fit for purpose in the twenty-first century, particularly in light of the financial crisis. 

FairPensions published its report in March 2011. It called for an ‘enlightened fiduciary' model for institutional investors to parallel the new duties of company directors introduced in 2006. The report argues that such a provision would provide a valuable ‘nudge' towards sustainable, long term investment to overcome narrow interpretations of fiduciary obligation which emphasise profit maximisation at the exclusion of all other factors, including financial system stability.

Second phase

In July 2011 we funded a second phase of work to develop the report's recommendations and to encourage policymakers and investors to address the issues raised. In March 2012, Fairpensions published a follow-up report, The Enlightened Shareholder: Clarifying investors' fiduciary duties, which suggests that fiduciaries should be empowered to consider the broader impacts of their investment activities on beneficiaries' future spending power or quality of life, as long as this does not compromise investment performance.

The report sets out detailed proposals for legislative clarification, modelled on directors' duties under the Companies Act 2006. It suggests that the Act's attempt to embed ‘enlightened shareholder value' into UK company law missed a vital piece of the puzzle by not tackling the perception that fiduciary shareholders are legally obliged to be unenlightened.

Project details



Ms Catherine Howarth, FairPensions

Grant amount and start date:


October 2009 - April 2011


July 2011 - October 2012