17: Willis Towers Watson's Sue Brake - Governance and the Real Cost of Poor Culture

In this podcast, MarketFox columnist Daniel Grioli speaks with Sue Brake, Senior Investment Consultant for Willis Towers Watson, about the importance of governance in asset management and the real cost associated with bad governance. Daniel also manages to get Sue to play a game in which he asks her to respond to quotes by David Swensen, CIO of Yale, about asset consultants. Overview of podcast with Sue Brake 2:00 Changing careers, from banking to investing 3:30 Banking is about implementing smart mathematical solutions, while investing is about effective decision making 5:00 Executive retreat told me that there is no winning 8:00 Embrace the mess; there is no straight line to becoming a president or CEO 9:30 The longer you are in the market, the more you realise that humility is good. 10:10 Failure is result of process not people 11:30 Being smart doesn't get you the whole way, you have to be curious and humble 12:00 Founding my own gourmet food company 14:00 Fortuitously I sold the company in 2007 16:00 Working at New Zealand Super 22:00 The reference portfolio is a governance tool 25:00 Simple reference portfolio beats most Australian pension funds 26:00 The reference portfolio can show you the difference between good governance and poor governance 27:30 Why does currency matters? 29:00 You have periods where currency fluctuations really can make or break you. 31:00 Is being far away from financial centres a positive or a negative? 34:30 Working at the IMF 38:00 What aspect of investing are universal? 39:00 Boards are like the Little River Band: there are no original members 40:00 Organisational efficiency 42:00 Investment cultures that have a competitive edge 44:00 Putting a price on governance 45:30 Less than 2 per cent of pension funds get the AAA rating for governance 46:00 The 12 factors of good governance 47:00 ADD LINK OF CLARK AND URWIN PAPER ON 12 FACTORS 50:00 Changing nature of asset consultancy 53:00 Are asset consultants gatekeeper? 54:00 Does the ownership of a consultant matter? 56:00 Do consultants need more skin in the game? 58:00 David Swenson says, Sue Brake answers