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| Type | Master's Thesis |
| Scope | Discipline-based scholarship |
| Title | Broad Structure and Investment Performance: Empirical Evidence for Swiss Pension Funds |
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| Institution | University of Zurich |
| Faculty | Faculty of Economics, Business Administration and Information Technology |
| Number of Pages | 65 |
| Date | 2014 |
| Abstract Text | Executive Summary This master's thesis makes an empirical contribution to the pension fund governance literature from a Swiss perspective. The objective is to investigate whether there exists a connection between board structure and investment performance. The main variables examined are the board size, the women share, and the board turnover. As there did not exist a suitable data set for Swiss pension funds to investigate this question so far, a new and unique panel data set is compiled. The data is mainly collected from the Swiss Central Business Names Index as well as the annual reports of the pension funds. The panel data set contains data from 2006 to 2012. In the year 2012, it includes 131 Swiss pension funds with combined investments of CHF 318 billion or almost half of the whole industry. This data set is then used to conduct cross-sectional and panel regression analysis, regressing di erent performance measures on the board structure and control variables. I nd that the average board size is a little bit more than nine members, of which about every fth is a woman in 2012. Over a period of three years, three out of ten board members are substituted on average. Time trends show that the board size of Swiss pension funds is more or less constant over time. The share of women on a board as well as the board turnover increases over the period from 2006 to 2012. The empirical analysis shows that the board structure of a pension fund does have an impact on performance. Board turnover has a positive impact on pension fund performance. This result proves robust in cross-sectional and panel regressions with di erent performance measures. This relationship could follow from conservative decisions of board members with long tenures or an interest mismatch of older board members and younger pension fund bene - ciaries. Such explanations are supported by corporate governance literature and pension fund governance literature. I nd a positive relationship between the board size and pension fund performance. A possible explanation is that decisions are better discussed and are broadly supported in larger boards. This result is however not very robust and prone to a multicollinearity problem with the size of the whole fund. It is in contrast to corporate nance literature and also partly contrary to existing pension fund governance literature. Finally there is no evidence that the share of women on a pension fund's board matters. This result proves robust in all regressions. It is in contrast to corporate governance literature, but mostly in line with other pension fund governance literature. With these results, this master's thesis contributes to the still relatively new research topic of pension fund governance, which so far has only very inconclusive results. The new insights gained into this area hopefully serve as a basis for future research. |
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