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ARNO KITTS – SESSION CHAIRCRITICAL FRIENDS – THE NEED FOR STRAIGHT TALKING

PLSA DB COUNCIL

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CHRIS HOGGCRITICAL FRIENDS – THE NEED FOR STRAIGHT TALKING

CHIEF EXECUTIVE, ROYAL MAIL PENSIONS TRUSTEES

Set the scene

Is there an issue?

Our survey helps to clarify

Then over to Paul…

WHAT AM I GOING TO COVER?

“ALL MEMBERS HAVE THE RIGHT TO EXPECT THAT THEIR

RETIREMENT SAVINGS BENEFITFROM EFFECTIVE STEWARDSHIP”

THE PENSIONS REGULATOR, DECEMBER 2016

GOOD GOVERNANCE

THE RIGHT PEOPLE DOING THE RIGHT THINGS

AT THE RIGHT TIMEGOOD GOVERNANCE CAN ADD 1-2% INVESTMENT RETURN EACH YEAR

Source (for the 1-2% statistic only): Ambachtsheer K, Capelle R and Lum H, (2006), “Pension Fund Governance Today, Strengths, Weaknesses and Opportunities

for Improvement, Financial Analysts Journal, October 2006”

SHOCK HORROR

“Eek! A client asked me for constructive

feedback on them”

OUR SURVEY (1) – RATING OF GOVERNANCE CAPABILITIESHow do you rate your clients’ governance capabilities

in the context of today's challenging operating environment

0 20 40 60 80 100

Very well equipped %

Well equipped %

Acceptably equipped %

Poorly equipped %

Unfit for purpose %

0 20 40 60 80 100

Very well equipped %

Well equipped %

Acceptably equipped %

Poorly equipped %

Unfit for purpose %

Consultants’ responsesProfessional Trustees’ responses

WOULD A MEMBER THINK STICKING AT ‘ACCEPTABLE’ WAS GOOD ENOUGH?

OUR SURVEY (2) – IS THERE AN ISSUE?

Importance of giving honest feedback

Consultants’ responses

0 20 40 60 80 100

81% - 100%

61% - 80%

41% - 60%

21% - 40%

1% - 20%

None

% of schemes where consultant gives honest feedback

Professional Trustees’ responses

COMPELLING EVIDENCE – THERE IS AN ISSUE

0 20 40 60 80 100

Highly Unimportant

Unimportant

Neutral

Important

Highly Important

“ONE CHAIR ENJOYS A ‘WARM’ RELATIONSHIP WITH A

FUND MANAGER AND SUBJECTS THE TRUSTEES TO

LENGTHY QUARTERLY PRESENTATIONS FROM SAID

PERSON WHICH ARE A COMPLETE WASTE OF TIME”

SOME ANECDOTES

“THERE IS OFTEN A STATUS QUO BIAS

AS BOARD MEMBERS LACK

KNOWLEDGE AND CONFIDENCE TO

TAKE DECISIONS”

“ALL TRUSTEE MEETINGS HAD BEEN HELD IN PUBS AND

VAGUELY MINUTED WHEN REMEMBERED”

“THE CHAIR IS POORLY SUITED TO THE

ROLE AS LACKS SKILL TO FACILITATE

DEBATE AND DEVELOP CONSENSUS.

PLAYING THIS PERSON OUT OF POSITION

HAMPERS THE BOARD”

There is an issue

Member benefits are at stake

Continuous improvement mind-set is essential

CONCLUSION

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PAUL RICHARDSCRITICAL FRIENDS – THE NEED FOR STRAIGHT TALKING

DIRECTOR OF STRATEGY, REDINGTON

WHAT DRIVES IMPROVEMENT?

FEEDBACK

ADVISER – TRUSTEE FEEDBACK

0 20 40 60 80 100

81% - 100%

61% - 80%

41% - 60%

21% - 40%

1% - 20%

None

On what percentage of the schemes that you work with have you observed the consultant providing critical/developmental feedback to the chair/trustees regarding how they execute their role? WHY

ISN’TIT

HAPPENING?

TODAY’S SESSION

The challenges of feedback

An effective framework

From framework to structure

BEHAVIOURAL FACTORS

Facing our own imperfections

Giving people difficult messages

Bankrupt systems

PEOPLE VS. PROCESS

Good progress on processes

Committees

Delegation

Feedback is easier

Less progress on people elements

Feedback is harder

FEEDBACK AND THE TRUSTEE ADVISER RELATIONSHIPWhat might stop you giving critical/developmental feedback to your clients?

Strongly Agree

AgreeNeither Agree

or DisagreeDisagree

Strongly Disagree

The chair/trustees are volunteers who are trying really hard – it’s unfair to criticise them

0% 13% 23% 56% 8%

Developmental feedback is uncomfortable 2% 18% 21% 52% 7%

I don’t have the expertise to do it 0% 3% 25% 54% 18%

Not in my scope of work 3% 15% 13% 52% 17%

Risk to the client relationship 10% 57% 18% 15% 0%

Negatively impact ability to work with the client 12% 57% 16% 13% 2%

Radical Candour

Ruinous Empathy

Manipulative Insincerity

Obnoxious Aggression

RADICAL CANDOUR Care Personally

Challenge Directly

OUR EXPERIENCE WITH RADICAL CANDOUR

Clear and simple language

Moral compass

It applies to everyone

It’s only a framework

It’s still a challenge

shows what’s expected

makes it the right thing to do

we are all in this together

it needs to be done thoughtfully and skilfully

but it gets easier with time

BUILDING FEEDBACK INTO THE SYSTEM

Pension Fund

Chair & TrusteesConsultants

School

GovernorsHead Teacher & Staff

SUPPORT SUPPORT

CHALLENGE / CRITICAL FRIEND

“THE CRITICAL FRIEND IS A POWERFUL IDEA, PERHAPS BECAUSE IT

CONTAINS AN INHERENT TENSION. FRIENDS BRING A HIGH DEGREE

OF UNCONDITIONAL POSITIVE REGARD. CRITICS ARE, AT FIRST AT

LEAST, CONDITIONAL, NEGATIVE AND INTOLERANT OF FAILURE.

PERHAPS THE CRITICAL FRIEND COMES CLOSEST TO WHAT MIGHT

BE REGARDED AS ‘TRUE FRIENDSHIP’ – A SUCCESSFUL MARRYING

OF UNCONDITIONAL SUPPORT AND UNCONDITIONAL CRITIQUE”

JOHN MACBEATH, PROFESSOR OF EDUCATION LEADERSHIP, CAMBRIDGE UNIVERSITY

THE CRITICAL FRIEND

TO BE YOUR CRITICAL FRIEND…What would you need to believe to give your clients full and clear developmental feedback on their capabilities?

Strongly Agree

AgreeNeither Agree

or DisagreeDisagree

Strongly Disagree

Support of firm and colleagues 16% 54% 23% 7% 0%

I won’t be ‘punished’ 20% 59% 18% 3% 0%

It won’t compromise the working relationship 29% 56% 10% 5% 0%

The chair wants and values feedback, even if it’s uncomfortable

49% 46% 3% 2% 0%

SO WHAT NOW?

Chair & Trustees Consultants

Find your critical friend / trusted adviser

Introduce the framework

Find a ‘safe space’

Find the right person

Intelligently introduce the framework

Seek permission

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