Small steps along the road towards good governance

Published by Claire de Thierry on

Estimated reading time: 6 minutes


We all know that to have a well-run pension scheme, you need to have good governance.  Procedures are set up, registers are duly completed and results are monitored.

This is all common knowledge and hopefully receives the attention it deserves. What sometimes gets overlooked is the impact of actions taken by individuals. Are the individuals associated with your scheme suitably governance-savvy, or do they need to sharpen up their act?  

Here’s a ten point governance audit checklist to kick-start a review of your individual governance health.  

Do you refer to scheme members by name in your minutes?  If so, what would happen if a hard copy of your minutes gets accidentally left somewhere by a trustee or an adviser? With GDPR being such a hot topic this could be extremely awkward and could even result in a fine.  

At the time of writing this seems a small risk because people are rarely going anywhere, but once we return to normality this would be a good practice to change. Why take an unnecessary risk?

Action: Do not refer to members by name in your minutes. Use another unique identifier.


Do you arrive at meetings fully prepared having given proper consideration to everything on the agenda?  

Preparation gives you the chance to:

  • get up to speed with difficult issues
  • ask questions if there is something you don’t understand
  • think about your views on the questions being asked and
  • ask for further information that you might like in order to make a decision.  

It is much more than a skim read through the papers.

Action: Take the time to prepare properly for meetings.

Do you ask for help when you don’t understand something?  

Trustees are ultimately responsible for the decisions made by the trustee board.  Also, you may have heard the phrase “Ignorance of the law is no defence”. There are probably exceptions to this (we aren’t lawyers), but if you end up breaking the law because you didn’t understand something, this may well not be a good defence.  

Action: If you don’t understand something you need to ask.

Do you prepare for a trustee meeting that you are unable to attend?

If you can’t go to a meeting there is no point in reading the pack, right?  Wrong. You are still responsible for the decisions made. You need to read the meeting pack with just as much care as if you were going to the meeting.  

Action: If you cannot go to a meeting ensure you read the pack in detail and make your views on any decisions known to the chair.

Do you read through the minutes of a meeting you were unable to attend as soon as possible after that meeting?

You are responsible for any decisions made so you need to check you are comfortable with them and flag this up with the chair as a matter of urgency if not. You may also have actions assigned to you.

Action: If you cannot go to a meeting ensure you read the minutes and actions and highlight any concerns to the chair.

Do you use unsecured Wi-Fi?

At the time of writing the opportunity to use free Wi-Fi in places like coffee shops is unfortunately limited but hopefully there will be a return to normality soon. 

When you use free Wi-Fi it generally isn’t secure, so any information you look at or send could be intercepted.  So please don’t do this for pension scheme business (and don’t do any personal banking then for similar reasons).

Action: Ensure you only use secure Wi-Fi. The best way to do this is to use Wi-Fi for your home account (provided it is password protected) or your employer’s account.
 

Do you agree you should have meeting dates a long time in advance for your scheme?

The longer in advance that meeting dates can be organised, the more likely it is that the right people will be able to go to them and that meetings will happen often enough. Many schemes set up a meeting schedule towards the end of a year for the whole of the next year. Of course commitments will change, but meetings can be rearranged if necessary. It’s better to have dates in the diary and to have to rearrange one or two meetings, than to not be able to find a date that works for everyone within a reasonable timescale.

Action: Set up a number of meeting dates in advance.

Are you able to concentrate during meetings?

If you find yourself struggling to stay awake during meetings then you are unlikely to be able to perform well. Perhaps meetings would work better at a different time of day? Do you need to stay in a hotel the night before a meeting to avoid having to get up really early? Are meetings too long for people to concentrate all the way through? Do they need more breaks scheduled in? Can you have shorter more frequent meetings, perhaps via an online meeting platform?

Action: Ensure the format of meetings means that people can stay alert for the duration of the meeting.


Do you make a note of any trustee business conversations you’ve had outside meetings?

It’s very easy to think that you will remember discussions forever but unfortunately, the mists of time mean that most of us won’t. Keep a note of the time and date of all key conversations. In some cases it will be best to send a quick email stating “we agreed to…” to reduce the chance of a misunderstanding. But do check to see if your conversation or e-mail exchange does in fact constitute a formal meeting which needs a formal minute or needs a formal resolution or amending deed. Your Chairman should be able to guide you. Also beware of having pockets of discussion. Try to have all trustee business carried out openly amongst the whole Board.

Action: Make a note of anything important that has been discussed outside of a meeting.
 

Are your meetings constructive and supportive?

It’s a bit “airy fairy” but to get the best out of a meeting those present need to behave professionally and respect other points of view. It needs to be a supportive environment where people feel free to speak constructively and do not get shot down when others disagree. Trustees also need to buy in to the concept of consensus and accepting a board decision.

As we are talking about what individuals can do, the first step is to examine your own behaviour. Once satisfied you can turn to that of others.  

A trustee effectiveness review may help you to introduce the topic for other trustees if it’s too difficult otherwise.  

Finally, if you do not feel that your advisers are constructive and supportive it may well be time to look elsewhere.
 
Action: Ensure your behaviour at meetings is appropriate. Then start to address concerns with other trustees and advisers.

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