5 things every trustee should know/do 1.responsibilities 2.governing document 3.prudent control...

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: enquiries@virtusconsultancy.comwww.virtusconsultancy.com