In my last couple of blog posts (see here and here), I’ve talked about why a non-conflicted, pension governance structure can work well for a pension scheme sponsor. We’ve also established that there are some key advantages, as a business owner or FD, to evicting yourself completely from your organisation’s trustee body. This might not be for everyone, and so it’s important to consider whether disembarkation is right for your business.
Whatever governance structure you decide to implement as a sponsor, the next point to consider is…
How you are going to make leaving the trustee body happen?
Any change must bring about a win:win situation. Change for change’s sake never works and it is vital that all parties fully understand the reasons for change and are fully committed to the outcome. Total engagement from everyone at the start of a project can create a firm foundation and reference point for when things get tough. Revisiting the “why” throughout the project is essential as this can get things back on track when motivations falter.
As a recap, “Why’s” come in many forms, including cost savings, more efficient decision-making processes and/or fewer conflicts of interest. Keeping key motivations at the forefront of everyone’s agenda is therefore essential throughout a project to keep change going and to ultimately get to the win:win results everyone desires.
But how do you go about getting that engagement?
Here’s five key points:
- Considering the best time within a pension scheme cycle to take on board governance change and allowing for what trustees need to do to be in a position where they can continue their day to day work seamlessly should help keep disruption to a minimum. The window following a valuation, when funding and investment strategy is agreed, can, therefore, be a useful time to address governance.
- Setting out the rationale and reasons for change robustly and clearly from the start will help keep engagement levels high.
- Communicating and being open with all parties before the formal project kicks off can warm everyone up to what is to come. Keeping informal dialogue open between trustee body meetings can therefore help.
- Allowing all parties to robustly test thinking and rationale for change in an initial face to face meeting before a plan is agreed will give everyone opportunity to own the project and bolster engagement.
- Engaging a specialist not already involved with the scheme to manage the project and keep momentum going can provide an independent advocate and “trusted friend” for all parties. This can keep communication channels open and allow all issues to be aired, without engagement levels dropping.
There will be devil in the detail of the actual change, of course. But with everyone on board and motivated to make it happen you will have the best foundation for getting results in the quickest, most efficient way.
If you would like to chat about how you can improve your governance structure within your pension scheme please get in touch.