Technology and Governance
September 2019
A match made in heaven?
As pension trustees and sponsors get serious about good governance, a key question is whether technology can play a meaningful role or is simply an expensive addition that looks good but adds little value.
As with many things, the answer is “it depends”. Technology solutions, when used correctly, can add enormous value and materially strengthen your governance framework.
However, before investing in technology you need to be clear on the problem(s) you are trying to solve. Technology only works well when it fills a recognised gap in your existing capability. Once you have identified your issue and the technology to solve it, you need your key stakeholders to buy into the rationale, so that it actually gets used!
The following questions are worth considering before investing in technology-based governance solutions.
Have you identified clear issues with your existing governance approach?
“If it isn’t broken, don’t fix it” is a very apt adage for technology investment. Current technology solutions can help produce strong audit trails, secure meeting management platforms and comprehensive risk evaluation tools. The question for a scheme is whether this capability is weak or missing in their existing governance framework?
Do you have the resource to support change?
Over the medium-term, technology will save significant time. However, in the initial transition period, whilst people get used to the new tools, considerable additional resource may be required to ensure the technology is correctly set up and used effectively.
Do you have that resource to spare or can you afford to buy it in? In our experience, there is a window during which new technology must show its value to stakeholders, otherwise distrust and lack of engagement will set in. To avoid this, you must resource the implementation process well.
Are your key stakeholders open to change?
A classic example is when an in-house pensions team believes there is an issue that technology can solve and, yet, when demonstrated to the trustees it is met with scepticism.
In bac’s experience, it is best to start with a collective stakeholder review of current processes, so there is a consensus that there are issues to be resolved. Then all stakeholders (including the trustees) can play a role in the selection process and there is ownership of the technology from the outset.
What is your geographical spread and how does your team work?
Technology is most effective when users are geographically spread (making collective decisionmaking more difficult) and when there is considerable work taking place between set-piece meetings. An example would be when trustee sub-committees meet and feed in recommendations and decisions to the full trustee board between trustee meetings.
Dashboard
reporting
One of the biggest challenges to making your governance work well is ensuring all the different areas of governance fit together and support your overall decision-making.
How do you stop governance feeling unwieldy and becoming a tick box process?
We provide a market-leading online dashboard which brings together all the different areas.
Online risk
register
We strongly believe that, to make risk registers effective, the risks need to be straightforward to understand and the register needs to be easy to access. Our online risk registers can be reviewed and updated in real-time to support decision-making discussions.
A number of clients now link each agenda item to a relevant section of the risk register. Those risks can be reviewed online and discussed at the relevant part of the meeting. By the end of the meeting the trustees can see how the decisions they have taken have affected the risk register, providing a real time audit trail of how they are managing the scheme’s risks.
Trustee
effectiveness
and training
Yourview is bac’s online training and evaluation tool designed to help trustees evaluate the strength of their governance, decision-making and advisers.
Yourview also provides bespoke online training modules to help trustees work through real-life scenarios and evaluate the strength of their scheme’s risk framework.
