CFO Sink Challenges Trustees to Consider Reforms for Improved SBA Oversight
FOR IMMEDIATE RELEASE: September 15, 2009
CONTACT: Kyra Jennings or Jayme O’Rourke, (850) 413-2842
CFO SINK CHALLENGES TRUSTEES TO CONSIDER REFORMS FOR IMPROVED SBA OVERSIGHT
“As one of the SBA’s three trustees, and the only current trustee with prior business experience, I have long argued that it requires more than three elected officials meeting twice-a-month for fifteen minutes to oversee a $100-billion fund that our police officers, teachers and other state employees depend on for a secure retirement,” said CFO Sink. “I am eager for all the Trustees to review this study in-depth and consider reforms that provide better oversight and accountability over the actions of the SBA.”
The study of best practices by other state pension funds and private sector investment professionals was conducted by a working group comprised of Trustee and SBA staff and presented to the SBA Board of Trustees today by CFO Sink’s Chief of Staff Jim Cassady. CFO Sink asked that the Trustees consider reforms based on this report and discuss recommendations during the next Cabinet meeting, scheduled for September 29.
CFO Sink offered her initial reaction to the report from the SBA Governance Research Project, detailed below:
- Board Expansion -- Given the limited ability of the Trustees to focus on the details of a $100 billion plus pension fund, a constitutional amendment that would expand the Board’s membership to include additional Trustees with investment and auditing backgrounds should be considered.
- Board Training -- Being a SBA Trustee is a huge fiduciary responsibility to fund participants; the Trustees should receive training on their fiduciary duties as recommended by managers and trustees of other large pension funds.
- Outside Auditors -- Engagement of an outside, independent auditing firm to promote transparency and give an independent analysis of the pension fund.
- Direct Reporting by IAC -- It is very important that the Trustees have direct input and recommendations from technical experts. In particular, the Investment Advisory Committee should be briefed by SBA staff then provide their recommendations directly to the Trustees.
At the May 13, 2009 Cabinet meeting, CFO Sink passed a motion initiating quarterly board meetings, the first of which was held on September 1, and a motion requiring each SBA trustee to appoint a staff member to an ad hoc workgroup charged with researching governance structure models and identifying best practices.
In March 2008, CFO Sink released ten specific recommendations designed to toughen the SBA’s financial safeguards, increase transparency in SBA communications and strengthen board oversight.
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