Corporations, pension funds and government entities all can respond to the presidential appeal for more voluntarism in enterprising and unremarked upon ways to bring important improvements to the lives of Americans. The kind of volunteerism we have in mind for corporations isn't asking executives to whitewash graffiti-scrawled picket fences (although Tom Sawyer cleverly enlisted "volunteers" to make money doing it.) Instead, corporations could volunteer to improve their policies on executive compensation and perks, and improve disclosure on their pension funds and other financial data, such as derivatives.
Boards of directors could voluntarily develop tougher pay policies for top executives and discuss the issue with shareholders.
Corporations could voluntarily make their pension footnotes more meaningful by revealing their actual pension fund contribution, if any. Despite the improvements brought by FAS 87, the financial report note still lacks the clarity it might have. Companies could provide some data, such as asset allocation data, on how the pension money is invested.
On derivatives, the Financial Accounting Standards Board and Securities and Exchange Commission are working on disclosure proposals. But voluntary disclosure would have informed interested investors of the potential risk of Procter & Gamble Co.'s exposure and might well have prompted corporate management to give the issue more scrutiny.
Pension funds, both corporate and government, ought to study voluntarily how to make defined benefit plans portable. In this day of dynamic employment practices, few employees can enjoy fully the benefits of long tenures with one sponsor. Perhaps in some wild way, pension sponsors voluntarily can develop an exchange or clearing system to assisting in portability.
For 401(k) and other participant-directed retirement plans, sponsors' volunteerism should include providing better communications on investments and financial planning. They should provide individualize investment performance information. They ought to add more options to plans, including individual brokerage options. In short, they should operate the plans with more of the investment analysis and services they have in their defined benefit plans.
For government, voluntarism is more difficult to define. One way is for government departments to take initiatives without waiting to be forced to do something by legislation. Government departments and agencies could start with improving the accounting and disclosure of financial statements in generally acceptable accounting principles.
These reports would make it easier for citizens to gauge the financial health and needs of government. It should toughen funding requirements to ensure public pension funds receive contributions on an actuarially sound basis. Those governments without them now should quickly adopt prudent-person investment policies.
The government ought also voluntarily to simplify and lower taxes to provide the freedom that allows enterprise flourish.
In calling for volunteers, President Clinton should publicly recognize the paramount duties of corporations and governments. For corporations, it is to make a profit. That effort has served the country well, for instance raising the value of the Standard & Poor's 500 from $1 trillion in 1982 to $6.1 trillion now, which immensely benefits retirees and others, easing the burden on government support.