Competence and Integrity
5 Jul 2021
Competence and integrity are two capacities and values which are as vital as they are difficult to define. Competence is often in the eye of the beholder, and integrity can mean different things to different people. A trustee board needs to be clear about the skill, competencies and behaviours that the individuals bring, and where the gaps might be. This must include the softer skills that many thought were lacking from the PMI’s proposed professional trustee qualification. Trustee boards need to have people that are good at mentoring, encouraging participation and facilitating discussion. These are difficult attributes to examine, but are just as important, arguably more so, than a technical knowledge of S75 debt.
We often find that new trustees struggle with the move to a non-executive role or are inexperienced at being part of a decision-making forum. Therefore, it is critical that the trustee board encourages the airing of views and provide a comfortable environment for people to ask questions. A trustee that behaves with integrity would welcome alternate views and challenge as a way to strengthen decision-making. Listening to challenge doesn’t have to mean changing your mind, it is about testing the assumption and facts that have influenced a position.
Trustee boards should be much more proactive, in the same way as corporates are now, about the skills and people they need. They should be much more assertive in ensuring that the trustee board has a good cross-section of competencies and understands what integrity means.
There are important questions that every trustee board should ask themselves:
- What kind of skills are needed?
- How big does the board need to be?
- What is an appropriate term limit?
- How should trustees be selected?
- What induction is provided?
All of these will play into the ongoing governance of the pension scheme. For example, a larger board can encompass a greater range or depth of expertise, but large forums can make decision-making unwieldy and debate protracted. It is about striking a balance, but if none of these things are considered in the first place, then problems could lay ahead.