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5 Things Every Trustee Should Know/Do
5 Things Every Trustee Should Know/Do
1. Responsibilities2. Governing Document3. Prudent Control4. Strategic Leadership5. Challenge6. Evaluation
Companies ActSeven General Duties (sections 171-177)
•Act within powers•Promote the success of the company•Exercise independent judgement•Exercise reasonable care, skill and
diligence•Avoid conflicts of interest•Not to accept benefits from third parties•Declare interest in proposed transaction
Charities Act
•Safeguard and protect assets – stewardship.
•Duty to act collectively.•Act in the best interests of the Charity.•Responsible for the administration of the
Charity.•Must avoid conflict of interests.•Responsible for everything the Charity
does.•Act reasonably and prudently in all
matters.
Governing Document• Legal document filed with the Registrar
• Sets out the objects of the Organisation
• Sets out the powers of Trustees/Directors in delivering the objects.
Definition
Corporate Governance concerns the appropriate Board structures, processes and values to drive the enterprise forward to achieve the company’s purpose whilst keeping it under prudent control.
Prudent Control Governance Framework 1•Company Law/Charity Law•Governing Document •Statement of Reserved Matters•Internal Financial Controls•Risk Register•Compliance Assurance
Statement of Reserved Matters
The Statement of Reserved Matters records the powers which are exclusive to the Board and provides a clear framework for the distinction between Board governance and the executive management control placed on the Senior Executives.
Statement of Reserved Matters
•Approval of financial statements.•Approval of Interim dividend and
recommendation of final dividend.•Approval of changes to accounting
policies.•Appointment or removal of Company
Secretary.•Remuneration of auditors and
recommendations for appointment or removal of auditors.
Statement of Reserved Matters•Approval of Strategic plans.•Approval of budgets.•Approval of borrowing. (threshold)
•Approval of tenders/contracts. (threshold)
•Approval of projects outside normal course of business.
•Formation of any subsidiary company, partnership or joint venture. (threshold)
•Approval of legal proceedings where significant financial/reputational risk. (threshold)
Internal Financial Controls
The aims of internal financial controls are:•to protect the company's assets;•to identify and manage the risk of loss,
waste, theft or fraud;•to ensure the financial reporting is robust
and of sufficient quality;
Internal Financial Control Framework
•Budget and Management Accounts•Cashflow forecast•Clear authority lines with £ thresholds for- Ordering equipment, goods or services- Signing cheques- Signing contracts- Authorising expenses
Strategic LeadershipGovernance Framework 2•Vision, Mission and Values•Organisational Strategy•Delegation to and Monitoring
Management•Building Stakeholder Relationships
Vision, Mission and Values
•What is your shared Vision?
•What is your Mission?
•What are your organisational Values which underpin your behaviour?
Strategy
•Have you got a Strategy?
•Is it written down?
•Do you monitor progress against it?
Stakeholder Management
•Have you identified your key stakeholders?
•Have you a tailored relationship building approach in place for each?
•Are you communicating your:Vision, Mission and ValuesEffective use of resourcesImpact/added value
Key Stakeholders
•Members•Investors/Lenders/Funders•Employees•Beneficiaries•Suppliers
Challenge Function
Trustee Evaluation
•Attendance •Participation•Challenge•Relationships
Board Evaluation
•Strategy•Monitoring Performance•Stakeholder Relationships•Risk and Financial Control•In the Boardroom
Board EffectivenessHigh
Understanding
Low High
Energy
TheRepresentative
Board
“Yes but” Malicious obedience
TheProfessional
Board
EngagedAdding value
ThePassiveBoard
Nodding Dinosaurs
TheCountry Club
Board
Dangerous Enthusiasts
For further information contact:
Brendan MullanTel: 028 9083 2311Mobile: 078 9981 8588Email: [email protected]
