There has been some debate recently on whether trustee boards should purchase governance software from one of their advisers, or seek an independent source. Similar arguments apply to the provision of trustee secretarial services.

Trustee secretaries facilitate the management of a trustee board. For example, they manage the selection and performance management of advisers and have access to all the relevant documentation. Governance software is used to maintain all trustee board documentation, including consultancy and service level agreements.

If one of the advisers provides trustee secretarial services or governance software, an important element of control – that of managing all advisers – is compromised. This is just one reason why it is increasingly difficult for medium and large schemes with several advisers and service providers to use trustee secretarial services or scheme governance software from their advisers or pension administrator.

Trustee boards need to commission trustee secretarial services or purchase governance software from a supplier that will meet their requirements, that the trustees trust and to whom they are prepared to be ‘tied into’. Whichever supplier is appointed or whatever system is selected, strong controls must be put into place to ensure access to the system is well managed and that ‘chinese walls’ are maintained to ensure no firms who are being reviewed or pitching for business are given an unfair advantage.

Whether they choose the independent option or not, trustees need to be confident that controls are in place that they can rely on.

Avgi Gregory