Sink's SBA expansion pitch gets mixed reax from investment board
As the disagreements continue between CFO Alex Sink and Attorney General Bill McCollum about what it would take to expand the state's pension board of trustees, Sink this morning made her pitch to the SBA's investment advisory group for a larger and more financially savvy board.
The reception was mixed, with some members of the investment advisory board seeming reluctant to make such a significant structural change. Others said the structure should be reevaluated, given the volatility and changing nature of the financial markets these days.
The trustees now are three of four Cabinet members: the governor, CFO and AG. Many other states with large pensions like Florida's ($110 billion) have larger oversight trustee boards.
"We have three elected officials who are in charge of the fourth-largest pension fund in the country, and that is an extraordinary responsibility," said Sink, former head of Bank of America in Florida. "The oversight has really seemed to be almost an afterthought," she said, pointing out that SBA discussions have traditionally been "maybe 15 or 20 minutes tacked onto the end of Cabinet meetings."
"It's critical that we look at expanding the board or restructuring the board to require that the board members have some kind of accounting or financial background," she said. "Think about this: After the election in 2010, it is possible we will have three new board members who have no experience with this. That would never be accepted in the corporate world. That is a situation that does not serve the beneficiaries well, and it doesn't serve the investors well at all."
Sink asked the Investment Advisory Council to offer her their recommendations, to be delivered next week at the SBA quarterly board meeting, on governance changes. Sink wants to expand the board to include at least two additional members with financial expertise; to engage an external auditing firm; and to require that SBA trustees get annual financial training.
Sink, a Democrat running for governor, said she is working on proposed legislation for lawmakers to consider this spring. McCollum, a republican running for governor, said in a letter to Sink this week that he, too, is working with lawmakers on proposed changes that include expanding the Investment Advisory Council (not the SBA trustees).