What does TPR say?
- trustee board meetings are a very important part of maintaining regular oversight of the running of a scheme
- the Chair should provide effective leadership, demonstrate decision-making skills at meetings, and encourage open and constructive debate
- you should arrive fully briefed on the agenda and be prepared to discuss each item
- boards should meet often enough to maintain effective oversight and control, which in most cases will be at least quarterly
- you should ensure that adequate time is allocated to discussing important strategic issues as well as scheme specific issues needing immediate attention.
Running effective trustee meetings is essential for good scheme governance. It ensures timely decision making, improves scheme efficiency, and can help lead to good member outcomes.
Read the guidance here.
What do we think?
The quality of meetings and decisions lies at the heart of good trusteeship and effective trustee boards. Doing so involves all aspects of effective teamwork – the people, the information, the process and the ways of working. And many areas of decision-making and oversight are complex and technical.
Common issues with meetings and trustee board decision-making, and what can improve things, include:
- If not now? A bugbear for some trustee boards is failing to make a decision or putting decisions off. Looking at this from a different angle, not making a decision IS a decision not to change at present. So if doing nothing is an option, the benefits and downsides need to be considered and a view taken on when to review it. If a decision is needed soon, why? What needs to happen to land it? What happens if we don’t make it? Linking decisions to scheme objectives and risks helps to clarify this.
- Delegate or abdicate? Some trustees may not be crystal clear on what work it needs to do to reach a decision, and what reliance it can place on work that has been delegated. This can mean the board works in too much detail and goes back over issues, for example in investment work. Knowing where powers lie, what activity or decisions are delegated and the reporting needed, helps to ensure that the trustee board focuses on the right matters, with the advice and information it needs. Having sufficient support, with training played in at the right times, is usually vital too.
- Wood for the trees? Linked to this, detailed information tends to encourage detailed board behaviours and/or some over-reliance on those trustees who can navigate and understand such packs. Boards need board-level (not executive level) information and packs overall may benefit from a regular weeding out. Slimming down will support the trustees in focusing at a more strategic level, and on decision work and key areas of oversight. This also goes for adviser and provider papers. Can the main points and issues for the board be put across in a 1 or 2‑page cover paper – if not, what is the problem? Can dashboards be used more, perhaps co-designed with the board? This all takes time and resource but it can be a highly valued ‘spend’. Getting the Chair’s early views on the pack and some feedback on the day from the board helps. And it helps to resist the allure of ‘just in time’ papers via digital board portals.
- Ready, steady go? Weighing the risks of a decision and when the trustee board is ready to take it, can be a skill in itself. Many pension trustee decisions involve complex and long running work with layers of input from several stakeholders, e.g. committees, advisers, employers, members, maybe TPR. Trustee expertise is needed to focus on what is important, make proportionate challenge and share views. Chairing skill and a decision framework with an agreed process can help when making complex or sensitive decisions.
- Herding? Reaching a decision through a well chaired consensual process that all can contribute well to is what the theory says. But most pension (and other) boards find this an ongoing challenge – time, culture, behaviours, cognitive habits can undermine good intentions; in some settings chairing or wider board skills may be lacking; conflicts of interest might lead to different hats being worn. Soft issues can lead to hard problems – like extra cost, wasting time, missing opportunities. Independently taking stock, agreeing how to improve ways of working, building relationships around the board table can all be valuable in improving this. The Chair’s role is vital in this, in support and being a role model.
- Outcomes. It can be quite common for decisions reached to still be unclear to some around the table. Summing up before moving to decision, confirming the decision made and any next steps, and then clearly minuting, with a draft circulated soon after the meeting, all help. The 2018 BA court case put a spotlight on the quality of minuting, capturing the process to reach the decision and the trail. Following up is important to monitor that outcomes are as intended, and post decision reviews are valuable to capture what went well and what can be improved for the future. Celebrating success is also good to do.
What do others do?
Agendas, decision and delegation frameworks etc.
Our clients use a variety of ways to manage meetings and decisions well. Talking about how to do so is one of the most effective ways, perhaps at the end of a meeting or at regular points in the year.
Our clients use a variety of ways to manage meetings and decisions well. Talking about how to do so is one of the most effective ways, perhaps at the end of a meeting or at regular points in the year. Some clients have evolved decision frameworks. Some have good delegation frameworks covering roles, responsibilities, reporting and escalation so that ‘who does what’ is clear across governing, advisory and service provider roles, with terms of reference, business plans and performance reviews aligned.
In managing ever-increasing pension scheme agendas, many clients have looked to delegate more work where possible, to outsource where it makes sense due to resource and/or skill needs. This means trustees needing to be well equipped in overseeing, getting assurance and holding others to account for the work they are doing on behalf of the trustee. Keeping papers shorter and more focused with clarity on the links to the strategy, objectives, business plan, main risks is an ongoing focus for many clients.
Making sure skills are refreshed for the strategic workplan, through succession and training, and bringing experienced people in for example as a committee co-optee, is getting to be a common approach among our clients. Shortening agendas so that regular items for noting are taken as read and dealt with on an exception or cyclical basis is also something that several clients are trying out.
How can we help?
In all of our governance and board effectiveness review work, helping clients with meetings and decision-making is a core element of our advice and development support. We observe meetings, we review packs and background documents, we talk to all those involved. Where appropriate, we facilitate strategy meetings, we help clients see what they are doing well, what can be improved and how it will help effectiveness and scheme outcomes.
All of our work with clients is tailored to what they are seeking to achieve. Please do get in touch if you would like to find out more. We have a great track record forged since Muse started 12 years ago.
Muse Advisory helps trustees and companies to better govern and manage their pension schemes. We believe that good governance leads to improved outcomes for members; through better fund performance, effective and proportionate management of risk, value for money and cost efficiencies and strategic and dynamic decision making.