A Fiercely Independent Asset to Pension Fund Oversight

Catherine Claydon has blazed trails in pension fund oversight. Since leaving Goldman Sachs in London, where she was Managing Director in the Pension Advisory Group, she has devoted her expertise to independent trustee directorships in what many consider a highly specialised form of investment.

She was the first woman named to the Witan Investment Trust Board in 2009 and today serves as independent chair of the BBC Pension Trust and as an independent non-executive director for the new British Steel Pension Scheme. Her previous trusteeships include deputy chair of the BT Pension Scheme Trustees, director of the Barclays UK Retirement Fund, the first independent member of Unilever UK Pension Fund’s investment committee, and directorships at Dunedin Income Growth Investment Trust, the London Metal Exchange, and Hermes Fund Managers.

In this interview with Simon Patterson, Catherine shares what she values most in her work as an independent trustee, and what it takes to succeed on the boards of organisations that safeguard the lifelong retirement funds of thousands of pensioners.

 

Simon: I’d like to focus on your board experience with pension funds and their investments. How did you become an expert in this field?

Catherine: My career began at Goldman Sachs. I worked first in derivatives and later in commodities, which we were developing as a new asset class for pension funds. That taught me two important lessons.

First, always go back to basics. What does an asset class bring to a portfolio? How does it generate returns, and why should it sit alongside what you already have?

Second, if you want real change, you need to talk directly to the asset owners—the pension funds—because they set the overall investment framework. Asset managers were tied to narrow mandates; they couldn’t suddenly shift into something new. Goldman even set up the Pension Advisory Group to have those strategic conversations with asset owners.

Later I covered Dutch pension funds, some of the biggest in Europe, which gave me wide exposure to everything from liability management to new investment vehicles. That work really set the stage for the trustee roles I do now.

 

Simon: How did you move into the roles you have now?

Catherine: After twenty years at Goldman, I wanted to do something different. I was being approached for non-executive director roles, and I also wanted to support younger professionals—especially women—building their careers in big organisations.

I teamed up with May Busch, who had been COO at Morgan Stanley in Europe. Together we designed programmes to help women build confidence and visibility. These days my focus is board work, but mentoring is still something I care about deeply.

 

Simon: Are you working with a specific kind of organisation on that?

Catherine: May does this full-time, while I dip in and out. I’ll run workshops occasionally, but most of my time goes into pension fund boards. Still, it’s very rewarding to see the impact mentoring can have.

 

Simon: How did your board work begin?

Catherine: My first appointments were to Witan Investment Trust and then the London Metal Exchange. I was the first woman on each of those boards, which at the time felt normal, but looking back, it was unusual.

My goal was to work directly with pension funds. That started with Unilever’s investment committee, which wanted an independent expert, and then Barclays Retirement Fund, where I became a board director.

 

Simon: One of the themes running through your board service is that pension funds generally are large in terms of the amount of money they invest and need to be incredibly careful about risk.

Catherine: Exactly. Defined benefit schemes, which is where I’ve spent most of my time, are all about the long term. You’re matching assets to liabilities that stretch out decades. That means making sure the portfolio is well diversified, liquid, and underpinned by a strong covenant from the sponsoring employer. At the end of the day, if the assets fall short, the employer must make up the difference.

 

Simon: Are you able to manage risk by becoming ‘active’ about how the assets are to operate?

Catherine: The board sets the big picture—the strategic asset allocation and the level of risk we’re prepared to take. The managers or, in very large schemes, internal teams, make the active day-to-day decisions within those boundaries.

We review strategy regularly, but you don’t make dramatic shifts unless something major changes, like the covenant suddenly weakening.

 

Simon: Let’s say a pension fund wants to do something for humanity, like remove plastic from the ocean. In most circles, that’s a relatively non-controversial goal, but it’s incredibly hard to do and can only be done if pension funds invest in the cause.

Catherine: It may sound straightforward, but it’s not. Trustees are legally bound to invest in the financial best interests of members. That said, sustainability is now seen as essential to long-term value. If the world doesn’t move to a sustainable path, everyone’s investments are at risk.

So most funds now have sustainability policies. Boards debate carbon targets, exclusions, whether to divest or stay invested and engage. Many prefer engagement—being a “good owner” and pushing companies to improve—often supported by “comply or explain” requirements for managers.

 

Simon: Does a pension fund board debate these things?

Catherine: Absolutely. Sustainability policies are discussed at length, and views can differ. But that’s part of the process—fulfilling our fiduciary duties whilst being mindful of long-term responsibility.

 

Simon: What would you exclude?

Catherine: It varies by board. Some exclude certain companies or sectors outright. Others prefer to stay invested and influence behaviour. Personally, I think engagement is often more powerful, though exclusions have their place.

 

Simon: Each decision that you take in a pension fund has a provenance so that you’re able to go back and understand why you made that decision.

Catherine: Yes, and that’s critical. There must be a clear record of the decision-making process so you can explain, later, why a choice was made.

 

Simon: In your experience, is running assets for a pension fund easier or more difficult than running assets for, say, a retail fund?

Catherine: They’re completely different. Asset managers are judged on beating benchmarks—it’s competitive and fast-paced. Pension funds aren’t competing. The job is to meet promises made to members, which makes it more like running an insurance book.

That doesn’t make it simple. You’re managing inflation-linked cash flows and dealing with uncertainty about things like longevity. But you do get access to top managers, advisors, and a strong regulatory framework.

 

Simon: You need provenance of a decision—proof that you’ve gone through the process.

Catherine: Exactly. The overriding goal is to make sure people get their pensions. That means being acutely aware of downside risks and always keeping sight of the long-term promises we’ve made.

 

Simon: If you’re going to support someone’s pension for the rest of their life, that’s a long-term situation. Do you have a view of the next 10 to 20 years? There are a lot of big question marks out there. Do you think it will change the life of a pension fund?

Catherine: The pace of AI development and today’s geopolitical instability are both real concerns. But they also create opportunities, so the key is diversification across industries and geographies.

The higher interest rate environment has improved the funding position of many schemes. Some may now be able to transfer their liabilities to insurers, something that wasn’t affordable before. Others may choose to run on.

 

Simon: Will those insurance companies take as much care as you’re taking?

Catherine: Yes. Managing risk is their core business. They’re heavily regulated, have prudential buffers, and are well resourced. I do trust their ability to look after members’ pensions.

 

Simon: You mentioned that you were supporting women’s careers. Do you think that women are better at this job than men, the same, or worse?

Catherine: I’d say the same—it really depends on the individual. What matters more is diversity. At the BBC pension fund, which I chair, the board is now over 50% women. That mix of perspectives makes us stronger. A monoculture, of any kind, is worrying.

 

Simon: How has your experience translated to Remuneration Committees?

Catherine: I enjoy that work. It’s about having clear principles. Pay must be competitive, yes, but culture, flexibility, and a supportive environment matter just as much. Often those things are what make people stay.

Outside advisors can also be useful, especially when the market shifts or the organisation changes. They bring an independent view and sometimes tell the hard truths boards need to hear.

 

Simon: Is there a trick or tip that you would give somebody who’s going down the same road?

Catherine: Three things. First, the board’s most important responsibility is hiring and overseeing the CEO. If it’s not working, you must act—letting it drag on only harms the organisation.

Second, work for consensus. It takes longer, but the outcome is stronger.

And finally, culture is vital. Set high standards of behaviour, be transparent, and don’t tolerate bad conduct. You’d think everyone knows what’s acceptable, but sometimes you really do have to spell it out. Setting the tone at the top is non-negotiable.

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Want to explore more of Simon Patterson’s interviews? Find them below.

• Culture Over Cash: Rethinking Rewards with Peter Newhouse
• Influencing Success: How Board Members Make a Difference
• Recognition and Appreciation: Magic Ingredients for Employee Engagement and Investment