How to deal with renegade trustees at your scheme

As the Scottish referendum approaches, the 24-hour news cycle brings an endless stream of companies being criticised for wading into the debate on the future of the union.

The problem that many chairs have is that they are not able to give feedback because those principles of governance and those principles of good behaviour are not presented to the trustees

Avgi Gregory, Muse Advisory

Energetic spokespeople on both sides and the wave of younger voters brought in by the lower voting age of 16 has forced the debate into workplaces and households alike.

At the governance level, it provides an interesting example of how business and politics are colliding, with talk from the nationalists of a "day of reckoning" for those companies that spoke against an independence vote.

For trustee boards, while personal political views are less relevant, the challenge for trustee chairs and the board as a whole is to make sure representatives leave their day jobs, or their affiliations, at the door.

Governance experts say that while the majority of union-nominated or company-nominated trustees can take off their day-job hat and put on their trustee hat, in a minority of cases representatives can lose perspective.

Avgi Gregory, director at governance consultancy Muse Advisory, said the trustee chair needs to take charge with performance feedback for the individual trustee who is threatening to sideline the meeting.

"It is very hard," she added. "It needs strength in character and strength in governance arrangements to manage." It is also difficult for trustee chairs to criticise certain behaviour if there were no formal expectations of how the board should behave.

Some schemes put together codes of practice for trustee behaviour, including leaving personal views outside of the room, and approaching each issue with the interests of all scheme members at heart.

Gregory added: "The problem that many schemes have and that many chairs have is that they are not able to give feedback because those principles of governance and those principles of good behaviour are not presented to the trustees."

Giles Payne, director at professional trustee company HR Trustees, said "vocal people" should be welcome on trustee boards as part of the debate to make good decisions.

Trustee chairs looking to control trustees that are promoting the interests of only one group of the scheme's members should be reminded that "all members are equal", Payne said, adding: "It is [about] bringing it back on track and reminding them of their obligations."

Janice Turner, founding co-chair of the Association of Member Nominated Trustees, said that as long as trustees "keep in mind that they are there to represent all the beneficiaries", there should not be a problem.

Neither should a trustee's background necessarily stop them from raising a particular issue: "All of these arguments should be viewed on their merits," Turner said.

Gregory pointed to a trend from election to selection as a method of picking trustees, as pension schemes become more focused on getting the right skills on the board. "There's no doubt that the trustee board these days need to [have] the right skills and the right behaviour."