Here's a good bit from the introduction about rationality:
Within Western philosophy, substantive rationality is given pride of place and is commonly defined as the capacity to draw logically correct conclusions from a given set of premises (ie. reasoning by deduction). In the social science disciplines that privilege theory over empirical evidence, there is a high premium attributed to deducing the logical implications of a set of propositions thought to characterise economic and social processes. For example, if "All people maximise utility" and "Pension fund trustees are people" then "Pension fund trustees maximise utility". By implication, if "Pension fund trustees are responsible for investment strategy" and "Venture capital investments produce higher rates of return" it follows that "It would be irrational not to invest in such opportunities".
Three objections can be made to the status attributed to substantive rationality. First, even if we agree that rationality is a natural trait of human beings it is unlikely that human beings are equally endowed with the ability to exercise rationality in practice. Just as some people can run faster, some people can jump higher, and some people can swim further, we should expect performance in logical reasoning to vary a great deal amongst human beings. Second, logical reasoning may give rise to false conclusions. In the real world, it matters both whether the underlying premises are correct and whether the reasoning process is valid. Third, substantive reasoning may be vulnerable to systematic anomalies. Thus, those that study the psychology of reasoning have been very concerned with how and why people are seduced by "plausible, but fallacious conclusions" (Wason and Johnson-Laird 1972). Moreover, it appears that many people whatever their socio-demographic status and educational qualifications are risk-averse (Kahneman and Tversky 1979).
When the report came out I was a bit worried by it as I thought it might add to pressure to 'professionalise' trusteeship with a big P. I have two problems with this. First, whilst professional trustees are often a useful addition to a board I don't think they can ever have the same member-focused instincts that MNTs do. And secondly, I think everyone employs flawed decision-making - as the research suggests. So the danger is that we would end up paying for trustees who are less worried about scheme members, and just as bad at judgment calls.
Anyway, with a bit of distance (and trustee bashing having died down in the UK) I now think the report is simply a useful bit of research. You can download it here.