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A trustee effectiveness review: a tool to help trustees
16 July 2021

A trustee effectiveness review: a tool to help trustees

Insight Partner

We know that not everyone finds the idea of a trustee effectiveness review appealing. Many feel such a review will take up time that could be better spent dealing with scheme issues, and the prospect of a list of improvements for busy trustees is not attractive. However, a periodic review of how trustees are operating collectively will be time well-invested and is an essential requirement for a well-run scheme.

“Isn’t the outcome just going to be a list of what’s wrong with the trustees?” It is understandable that trustees who are doing the best job they can in the short time available to them, and with limited resources, might shy away from such a review. Especially if they feel that it is as much as they can do to keep up with all the demands on their time. Surely a ‘to do’ list will only compound things?

I believe that a trustee effectiveness review should be seen as a tool to help trustees, not to punish them. It isn’t a personal assessment, but is about how the group can operate optimally as a whole.

A significant part of the exercise should cover identifying how to make (sometimes small) improvements that enhance the quality and speed of decision-making and ensure actions are implemented. Trustees should also review their governance in the light of changing circumstances, bearing in mind that what has perhaps worked well in the past may not necessarily be appropriate now and in the future. Here’s a small sample of the questions a review might try to answer:

  • Are meeting papers produced on time and in a helpful format?
  • Is there a framework for making decisions quickly between meetings?
  • Do you know what to do if there is an emergency?
  • Do you know who is responsible for delivering all the scheme activity, and who monitors all the risk metrics you have established?
  • Is the structure of your board still appropriate as your scheme matures and heads to its end game?
  • Do you capture learnings from previous work and projects, and embed them for the future?
  • How are all points of view taken account of? 
  • Is your board sufficiently diverse in terms of skills, experience and societal demographics to ensure diversity of thought and avoid any blind spots?

A trustee effectiveness review should help to highlight any issues, thus giving the 

trustees the opportunity to determine how to address them and implement solutions. It can also serve as valuable time for the trustees to get to know each other better which can be very helpful, especially given many pension scheme trustees may only meet once a quarter so they are not necessarily used to working together.

I often recommend holding a separate session away from busy regular meetings to work through the review findings. A well-facilitated meeting can generate debate and discussion about where improvements can be made as well as providing reassurance where things are working well. It is also essential that the review process includes the production of a clear action list and identifies accountabilities and timescales. It should not, however, be seen as a ‘once and done’ exercise and it is important to periodically revisit the agreed actions to ensure continuing progress. It may also be helpful to elicit the views of the scheme’s advisers since they can provide a useful perspective into how the board operates.

“It’s not a good use of time”

If a trustee board is so busy dealing with the day-to-day issues that it struggles to find time for a trustee effectiveness review, then surely something is not right? Periodically taking a step back to reflect on how the board operates can be time well invested to ensure the trustees are suitably equipped for meeting the scheme’s future challenges. It can also be beneficial to carry out a review ahead of a major project, such as a buy-out, to ensure the board performs optimally.

New legislative requirements

Under The Pension Regulator’s new code, schemes will soon be required by law to have an effective system of governance in place. It is hard to see how trustees can be confident they have an effective system of governance without first checking they themselves are effective as a board. The ultimate responsibility of a pension scheme trustee is to provide members with the benefits to which they are entitled and I firmly believe that a more effective board of trustees will ultimately deliver better outcomes for members.


This article was featured in Pensions Aspects magazine July/Aug edition.

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Last update: 21 July 2021

Kathryn Foster
Kathryn Foster
Barnett Waddingham
Associate, Senior Pensions Management Consultant

Pensions & Benefits In-house Specialist, Global

Salary: £50000 pa

Location: Mix of Office (London or Birmingham, 1-day only) and Home

Pensions Manager

Salary: £50000 - £80000 pa

Location: London (Stratford)

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