I’ve written blogs before about how important pension scheme governance is. But having been working at my dining table for near enough two months in this strange new virtual world, I was thinking about how easy it could be to gloss over governance as an ‘added extra,’ and that concerns me. Hence, this blog.
Trustee meetings are now being held virtually and I suspect they will be for a significant length of time to come. That’s not necessarily a bad thing, although it does mean that a change of thinking – and approach – is needed. Full day, even half day trustee meetings are now off the agenda. We need to keep agendas clear for focused discussion and key decision making. There is absolutely no point trying to squeeze a 5-hour agenda into a 2-hour meeting. It’s not going to end well.
The same can be said for the size of the meeting pack. With the best will in the world, for a trustee (lockdown or no lockdown) reading a 400-page pack on an iPad is not fun. We need to make sure that the papers we create are clear, concise and directional. Papers that act as background reading or ‘for information’ should still be issued – but in a different way. Bundled together and put in a separate ‘reading’ pack is the approach we have taken at Buck. This keeps the main pack shorter – yet totally focused on the issues that need to be addressed.
Thinking through what needs to be on the agenda and taking a best guess as to how much time each item will take is not new. But it is so important that this is done in a well thought out way so that adequate time is given for discussion, so that the right decisions are made. It could be that you arrange for a sub-set of the trustees to consider a particular issue and report back to the full board, or you arrange more frequent, shorter meetings. Whatever approach you choose to take, governance needs to be discussed, and where necessary, action taken.
Take the risk register as a good example. I’m sure most trustee boards will have made a vast number of decisions as a result of this current pandemic and the impact it is having on their scheme. How, in a year’s time, will they remember what all these decisions were? The answer lies in good governance – capture them in a specific COVID-19 risk register. This will act as a good audit trail, provide assurances to the sponsoring employer that the trustees have considered everything they need to and provide a document which can be shared with insurers and auditors.
That’s just one example, but my point is that effective governance leads to a better run pension scheme.
Please don’t let these current challenging circumstances lead to a drop in the good standards that were developed following the introduction of the Pensions Regulator’s 21st Century trusteeship initiative.