Trustee effectivenessLouise Thomson FCIS, Head of Policy (Not for Profit),

ICSA: The Governance Institute

5 July 2017

What makes an effective trustee?

Session outline

• Role of trustees

• role of the chairman

• role of individual trustees

• hallmarks of a successful trustee board

• Trustee composition and succession planning

• Principles of sound decision-making

• Effective meetings

• Evaluating trustee performance

Who is a trustee?

“…The persons having the general control and

management of the administration of a charity”

- Charities Act 2011,s177

Legal duties of trustees

CC3: The essential trustee:

• Ensure your charity is carrying out its purposes for the public benefit

• Comply with your charity’s governing document and the law

• Act in your charity’s best interests

• Manage your charity’s resources responsibly

• Act with reasonable care and skill

• Ensure your charity is accountable

Chair: first amongst equals?

Role of the chair…a few examples

• Leading the board, ensuring it discharges its duties and responsibilities

• Setting a board agenda which is primarily focussed on fulfilling the charity’s objects

• Building and developing the board and individual trustees

• Ensuring proper constitutional and governance arrangements in place

• Ensuring the board has appropriate support, information and evidence

• Contributing to building a shared vision of the aims, values and culture

• Overseeing governance, ensuring board transparency and responsiveness

• Ensuring meaningful stakeholder engagement and accountability

Trustee contribution and commitment

• Induction

• Meeting attendance

• Contributing to meetings

• Ongoing communication outside of meetings

• Training and development days

• Strategy sessions

• Stakeholder events

• Board evaluation

Hallmarks of an effective board

The board of trustees will provide good governance and leadership by:

• Understanding their role

• Ensuring delivery of organisational purpose

• Working effectively both as individuals and as a team

• Exercising effective control

• Behaving with integrity

• Being open and accountable

Trustee recruitment, composition and succession

• Governing document

• Charity and company law

• Skills audits

• Open and evidenced processes

• Diversity

• Due diligence

• Induction

• Review

• Tenure

Diversity in the boardroom

• Critical assessment

• Sound judgement

• Courage

• Independence of thought

• Openness

• Honesty

• Tact

• Humility

• Flexibility in thinking

• Ability to listen

• Ability to forge and build productive relationships

• Ability to develop and inspire trust

Boardroom diversity: What does it mean to you?

Why diversity matters

• Role models

• Life experience

• Better challenge in the boardroom

• Increased knowledge

• Better decisions

• Reach wider audiences

• Challenges perceptions

• Added legitimacy

Diversity is a solution to a competency problem

Principles of sound decision making

Charity Commission guidance states that trustees must:

• Act within their powers

• Make decisions, and act, in the best interests of the charity, its current and

future beneficiaries

• Be appropriately informed of all relevant factors relating to a significant proposal

under discussion

• Not be swayed by personal interests or factors that are irrelevant

• Be able to defend their decisions in terms of their legal duties and powers

Good decision making facilitated by:

• Ensuring participants are afforded time to prepare for meetings

• High-quality board packs

• Obtaining expert opinions when necessary

• Allowing time for debate and challenge, especially for complex, contentious or

charity-critical issues

• Achieving timely closure

• Providing clarity on the actions required, including timescales and

responsibilities

Factors adversely impacting good decision making

• A dominant personality or group of trustees on the board which can inhibit

contributions from other trustees

• Insufficient attention to risk, and treating risk as a compliance issue rather than

as part of the decision-making process

• Failure to recognise the reputational implications of trustee decisions and the

actions arising from those choices

• A reluctance to involve trustees, or viewing the trustee meeting as a ‘rubber

stamp’ to approve decisions already made

• Complacent or intransigent attitudes

• Weak organisational culture

• Inadequate information or analysis

Effective meetings

“The overriding purpose of the law of meetings is to ensure that those who are

entitled to participate in the company’s decision-making process are given a

reasonable and fair opportunity to do so but also to ensure that decisions can be

made by a majority of those who actually choose to participate.”

The Law and Practice of Company Meetings, A. Hamer, ICSA Publishing 2013

What are the key factors in delivering an effective meeting?

• Time and frequency of meetings

• Agendas and corporate planning

• Minutes

• Managing conflicts of interest/loyalty

• Behaviours and attitudes

• Preparedness

• Constructive challenge

• Decisions and resolutions

Benefits of a skilled chair

An adept chair can facilitate an effective meeting by:

• Focussing on what the meeting must achieve and gain commitment to the

agenda

• Establishing the ground rules

• Using a business-like style (timely, focussed, maintaining gravitas)

• Being inclusive and non-partisan, allowing trustees to participate

• Offering an overview of the task but avoiding beginning with their own view or

questions

• Steering discussions in a structured way; managing time and personalities

• Testing comprehension; paraphrasing and checking back

• Building on contributions to reach consensus

• Summarising and repeating actions to be taken before moving to the next

agenda item

Self-reflection and evaluation

Board evaluation

• Desk top research - current governance systems and how effective they are

• Questionnaires – providing a first cut of information that will feed into any face-

to-face interviews

• Open interviews – useful if there has been any board changes

• Board observations – these may be seen as creating a false environment

• 360 degree feedback within boardroom – and beyond?

• Marzipan layer input – helpful for succession planning

• Peer practices – benchmarking against similar entities

• Skills audits – highlighting collective strengths and areas for improvement

How would you deal with a ‘rogue’ trustee?

Thank you