In this chapter we will contend the following: the trust model is a poor fit for the relationships in which plans are embedded. Those relationships warrant, at minimum, decision-makers considering members’ interests as workers at the associated enterprise, which derive from the financial risks of plan investments in other enterprises in general, and arguably the impact of harms that result from the behaviors of specific, sometimes competing enterprises. We express skepticism that these relationships justify taking account of members’ interests other than as members or workers. However it can be justified based on a different line of argument. It concerns the extent to which members (or others) who participate in collective vehicles for investment should retain the voice they would otherwise have with respect to advancement of their interests in the case of their own individual investment decisions. Vindication of a broader range of members’ interests might have merit as a matter of social policy rather than as one of advancing those interests for their own sake.
The foregoing points are made within the context of what is deemed to be decision-makers’ duty
of loyalty. However, we briefly explore the import of what is termed their “duty of care” for the issues explored. In doing so, we assert that the statutory framework that defined that duty was largely devoid of substantive content. The content was supplied by investment theories and practices at best insensitive to the relationships in which plans are grounded. Moreover, those theories and practices embodied problematic claims about the goals that might legitimately be pursued by the enterprises in which plans might invest. These claims stand in tension if not in direct conflict with those of members’ interests that decision-makers might appropriately seek to advance. The foregoing suggests a close or intimate connection between how fiduciary duty, with respect to investment in enterprises, and the legitimate goals that might be pursued by those enterprises are understood.