NCVO Trustee Conference 2012: All presentations

NCVO Trustee
Conference 2012
in association with BWB
#Tconf12
Good Governance
and Leadership

Welcome
Martyn Lewis CBE
Chair, NCVO
Welcome

Twitter: #Tconf12

#Tconf12

Sponsor‟s Address
Peter Knapton
Welcome
Director of Charities
M&G Investments

#Tconf12

Stephen Lloyd
Senior Partner, BWB

#Tconf12

Tony Hales CBE
Chair
Canal and River Trust
Welcome

#Tconf12

Tom Rolt Robert Aickman

www.waterways.org.uk

Adversity Advantage

• Cuts in funding
• Property Asset grab
• Rotating Ministers

• No consistency

Aims

• Consistent Objectives
• Consistent funding
• Governance by Stakeholders
• Devolution of power

Engage and Seek
Advice
1. Cross Party Support
2. Charity and 3rd Sector Advice/support
3. Stakeholder bodies – BWAF/IWA* involved –
boaters ramblers, fishers etc
4. Professional Advice – finance, legal, charity
5. Charity Commission
6. Employees and reps ( jobs , terms)

*(Chair attended Board meetings as observer)

SMASH AND GRAB –
Autumn 2009
Independently verified record
An exciting vision for government and
people
200 Riparian MP’s (stakeholder lobby)
Senior Government backbenchers

DEFRA AND Treasury Ministers

Labour Manifesto

Working Group

Defra, Treasury, Cabinet Office, BW,
(BIS, Justice, Transport, DCLG)

Build the case/ communicate all the time

Issues

• Governance • Pensions

• Funding • Legislation (1500AD)

• Tax • Future Legislation

• State Aid • Consultation Process

• Scotland • Safeguards

• Environment Agency • Ombudsman

Mid 2011

Initial Trustees (5 new and 3 former)
Charity
Commission, Oxfam, Ramblers, English
Heritage, Inland Waterways Association

Trustees
Observers at all Board Meetings
Shadow Board Committees
Task Groups –
Income, Expenditure, Governance, Voluntar
y Resource

Objectives, Governance, Contract (Financial
Model)

Contract

How long?
How much?
Inflation?
What conditions?
Last resort position?
Pensions?

Council

TRUSTEES
Waterway Partnerships

Advisory Groups Management

Council

Initially 7 elected – Boating Community
Employees
13 selected – Regional Chairs
12 appointed – Stakeholder Associations e.g.
Anglers

Plus 3 selected to add diversity
Plus up to 15 for new navigations e.g. Environment
Agency

Contract

1. Initial offer - £390m – 10 years
2. Agreed objectives for system
3. Recognition of this CSR period
4. Final agreement - £800m – 15 years with
reasonable inflation cover and £125m last resort
pension underpin

Contract
Safeguards
1. Waterway infrastructure – cannot dispose without
Secretary of State approval
2. Property dowry – maintain capital and invest in line
with agreed strategy
• Joint appointed PROTECTOR
3. Must maintain Major Assets
“ “ Towpath Access
“ “ Flood Assets

Other

1. Research and agree name and branding
2. Negotiate a separation of assets with Scotland – 3
Wise Men!
3. Negotiate with Pension Fund Trustees including
Property Partnership (Scottish Law) and ultimate
Government Guarantee.
4. Recruit a Patron – HRH the Prince of Wales
5. Merge the Waterways Trust - museums

Legislation
1. Public Bodies Bill – December 2011 (Henry VIII)
2. All Parliamentary Waterways Group and Minister published
Order on 29th February 2012
3. Westminster Scrutiny
• EFRA Select Committee
• Lords
• All Parliamentary Waterways Group
4. Scottish Parliament and Welsh Assembly approval
5. Westminster approves without division 26th June 2012
6. Order signed July 1st 2012
7. Canal and River Trust and Scottish Canals assume British
Waterways responsibility July 2nd.

Canal & River Trust
• 2,000 miles of canal and rivers
• 72 reservoirs
• 4 ports
• 3,112 bridges
• 650 embankments
• 2,727 heritage structures
• 65 Special Scientific Interest sites and

• 35,000 boats
• 11 million visitors
• 38,862 volunteer days

The Future

1. Waterways are at the heart of what we do.
2. Navigation and towpath access is essential.
3. Successful social enterprise – entrepreneurial and
efficient.
4. Attract new resources – volunteers and income.
5. Utilise waterways to engage and involve
communities and stakeholders to REAL
OWNERSHIP.

The Future

1. Environment sites and corridors
2. Heritage – sense of place
3. Education – schools to skills
4. Restorative Justice
5. Health – walking to white water
6. Economic stimulus
7. Arts – galleries to lock gates

The Past
• Historical Heroes
• Low numbers
• Low skill (litter)
• Employee resistance (job threats)
• Health and safety barriers
• Management effort!

Action
• Leadership
• Structure – policy and procedures
• Low hanging fruit – confidence
• Licenced groups (Health and Safety)
• Invested in volunteer leaders – 27
• Measure – ThankQ – Board KPI
• Celebrate Success
• Recognition and Reward
• Brian Blessed!

Volunteer
Days - £3m
Volunteer Days
40,000
35,000
30,000
25,000
20,000
Volunteer Days
15,000
10,000
5,000
0
2007/8 2008/9 2009/10 2010/11 2011/12

Virtuous Circle

Better Waterways

Voluntary Wider Use
support

New Community
Engagement

AM1: Innovation – what
should you be doing
about it?
Katherine
William-Powlett

A new idea that works

• ‘To us innovation means coming up with new
ways of doing things which are infinitely more
interesting, engaging, encompassing, flexible:
right now everybody has got to be as flexible
as they can’

• ‘To be an innovative organisation, everyone
within it has to be part of the process’

External drivers of innovation

Internal drivers of innovation

I am happy to take part and I am
1. Trustee
33% 33% 33%
2. CEO
3. Other

O
e

er
te

CE

h
us

Ot
Tr

Innovation is important to my
organisation
50% 50%

Innovation is
1. Important
2. Not important

t

nt
n
ta

rta
r
po

po
Im

im
t
No
Innovation

What drives innovation in your
organisation?

Do you think your organisation
is innovative? your neighbour
Discuss with

My organisation is innovative
50% 50%

1. Innovative
2. Not innovative

ive

ive
t

t
va

va
no

no
In

in
t
No

Set the Scene

Stimulate Stretch & Strengthen Ideas

Step Back

Set the scene

Board Partnership Diversity/
Culture with CEO Involvement
Turnover

Board Culture
• Our board is very respectful of contributions: if it
wasn’t it just wouldn’t get out of the blocks’

• ‘We have free space on an agenda to think
creatively about ideas’

• ‘It bounces backwards and forwards. So we
might start something at the board and say let’s
push something to a subcommittee for a bit more
then it comes back with renewed confidence or
may be a few new ideas added onto it’

We set time aside on our agenda for
new ideas
50% 50%

1. Time set aside
2. No time allotted

e

.
t..
sid

ot
a

all
et
es

e
t im
m
Ti

No

My organisation is innovative?

50%
Innovative

50%

50%
Not innovat...

50%

Time set aside No time allotted

Partnership with CEO

• ‘If we are taking a lead from the CEO then that’s a dangerous
position to be in’

• ‘It is a disaster when the Chair and CEO don’t get on : a disaster’

• ‘I think it is about taking hierarchy out of it and saying we are not
two levels of people- we are all people who care – we just do very
different roles’

• ‘It is very much a question of having faith in the staff’

• ‘If we want to encourage debate, conversations, dialogue resulting
in innovation, we have to have well prepared papers in order to
facilitate that’

Involvement

• ‘You cannot make strategic decisions without
understanding what the organisation is about...’

• ‘You have to have innovation in a context so you do need to
have clarity of vision’

• ‘If we have a vision we can all coalesce around and we
know who we are and what our values are then we can
innovate’

• ‘Sometimes you roll up your sleeves for the thing that you
can offer and bringing your whole person into the board’

Diversity and Turnover
• ‘Diversity is what makes us as an organisation
fantastic and at board level it is great’

• ‘Things are hard to change when you have a
cadre of the old guard’

• ‘All you need to do is throw someone different
into that mix and then you start your debates’

• ‘Good decisions are made by taking a bit from
everybody’s expertise, experience or knowledge.’

The crucial role played by diversity

How diverse is your board?

Our board is diverse in
background, experience, skills and
personalities50% 50%

1. Diverse
2. Not diverse

se

se
r

r
ve

ve
Di

di
t
No


50%
Innovative

50%

50%

Not innovat...

50%

Diverse Not diverse

Stimulate

External
Bottom up Vision
environment

Stimulate
• ‘They bring really good info to the table sometimes:
they are a little bit like invisible antennae’

• ‘We are starting to become a user led organisation and
that means letting go of a lot of power and really
listening to and engaging with people’

• ‘How much better does it get in terms of an
organisation setting their vision- your members want
to get their picture taken under it!’

We have an ambitious vision that
stretches us to do better
Vision is 50% 50%

1. Stretching
2. Un-stretching

Vision

ng
g n

hi
hi

tc
tc

re
re

st
St

-
Un


50%

Innovative

50%

50%

Not innovat...

50%

Vision
Stretching Un-stretching

Stretch & Strengthen

Support
Challenge Debate with
Skills

Stretch through Challenge

‘The innovation comes from the stretch and them pushing
for the stretch and saying, we want something different
now, or we want something more’

‘If she lets me off the hook on things I worry’

‘It is
almost like turkeys asking for
Christmas isn’t it, for me to be saying I
want more challenge and more dissent but
actually I think it would be healthier... as
long as I can control it!!’

Strengthen through debate
• ‘We want to generate more disagreement and
more conflict on the board to get a better
spread of opinions’

• ‘A board, in order to promote an environment
of innovation, need to go into a room knowing
that they are going to do more listening that
talking’

As a board we debate well

50% 50%

1. Debate-good
2. Debate-poor

r
d

o
o

po
go

e-
e-

t
t

ba
ba

De
De


50%

Innovative

50%

50%

Not innovat...

50%

Debate-good Debate-poor

Step back

Allow Hold to
Trust
risk account

Stepping back
• ‘I think also one should not underestimate the
kind of tacit support from the board that just let
us get on with it’
• ‘There is a world of difference between looking
at risk assessing it and deciding whether you are
comfortable with that degree of risk or not, and
just being plain crazy’
• ‘Don’t get in the way too much! You need to
allow things to flourish and yet not be to far
away’

We are risk averse
1. Risk averse 50% 50%
2. Risk accepting

e

g
rs

t in
ve

ep
a

cc
sk

a
Ri

sk
Ri


50%
e
iv

50%
at
v
no
In

50%
...
at

50%
ov
nn
ti
No

Risk averse Risk accepting

What can trustees do to
encourage innovation?

Set the Stimulate, Stretch Step
scene & Strengthen ideas Back

Develop Under- Look for Be Engage
Ensure ideas passion- in
Attend strong Be stand Provide Support
involved diversity from ate intellig- Accept Hold to
to partner-
&
external informed with
risk
Trust account
culture ship with enough environ- bottom about challenge ent skills
CEO turnover
ment up vision debate

‘We are faced with tough sets of
circumstances with no obvious
solution and the only way we can
move forward is by trying things
out’

AM2: The strategic
importance of remaining
true to your values
Donald
Ritchie, Senior
Consultant NCVO

In today’s workshop

• What do we mean by ‘values’?
• The value of living our values
• 3 ways that values really work for organisations
• What role can Trustees play?

About values

• Values are probably the highest level strategic decision that
an organisation takes
• Done well … they can define who you are, what you do and
why you do it
– The beginning: what inspires you – your reason to exist
– The means: what you do and how you do it
– The end: what you seek to achieve – your ultimate impact
• Values are there for the very long term – the language that
expresses them may change, but rarely the meaning

About values

Values are typically expressed in two main ways:
• Your beliefs about the world, in relation to your field of
work – both what’s wrong with it and what it should be like
• The principles that drive your work – about what you do,
and perhaps more importantly, about how you do it

Benefits of clear values

Organisations that have genuine shared values achieve more
• Leadership, strategy and action are more closely aligned
• Working relationships are more productive
• People understand when to act on their own or with others
Research finding: companies with strong cultures that are
founded on shared values outperformed their competitors:
- Revenue grew four times faster
- Jobs were created seven times faster
- Share prices grew twelve times faster
- Profits were 750% higher
- JP Kotter & LJ Heskett, Corporate Culture and Performance, 1992

Values in today’s context

Values-driven organisations stand a better chance of thriving
in these straitened times, by being better placed to:
• Maximise their impact
• Maximise their income
• Minimise the risk of drifting off mission

How good are your values?

Seeing is believing … key challenges are:
• Understanding what values mean, a communication issue
• Seeing values enacted in day-to-day activities
Empowerment is at the heart of the way that we work. In all
things we:
• act with integrity
• embrace democracy
• aspire to excellence and
• promote equality

Our vision, values and goals

We believe in people
It all starts with one simple fact: all human lives are of equal value and full of potential. Experience
tells us with the right support and training, people can work their own way out of poverty.
Easy guide to Oxfam
The impact of our work

We work better together
Collaboration is at the heart of everything we do. Oxfam partners with organisations who have
unique local expertise, connections and experience. Doing so not only saves us time and
money, but also helps foster trust and respect in the communities we support. And through
working together, infrastructures are established that will keep doing good work when the
communities we work with are ready to go it alone.
About our partners

We say it like it is
There are some people who never know when to keep quiet. Fortunately, quite a lot of them
campaign with Oxfam! Whenever an issue is blatantly unfair, or secretly shoved under the
carpet, we can rely on thousands of people who come together to demand - and get - results.
Campaign with us
Join the GROW movement

Living your values

An exercise in pairs:
Choose one of your organisation’s values, and think about:
• An example of how that value is embodied in the work of
your organisation
• What an outsider would make of your organisation without
being told that value

Share your thoughts with your partner
You’ve got a couple of minutes each …

Three ways that values can really
work for your organisation

1. Stand out from the crowd

Values define who you are, what makes you tick
• That’s your beliefs and how you approach your work
• These set out what’s different, special and maybe unique
about your organisation
• Then people outside your organisation can understand you
– for example funders and people you want to influence
• Clear and meaningful values should get an ‘aha’ response,
… and not a ‘so what?’
 How well does your organisation communicate its values?

2. Act together as one

Values are at the heart of peak performing organisations
• Everyone understands your values and what they mean –
that’s staff, Trustees, volunteers, etc
• People also share the values, quite likely that’s why they’ve
chosen to be involved in the organisation
• The organisation lives and breathes its values – they drive
decisions and activities, and are visible throughout its work
 If 10 people in your organisation were asked to talk about
its values, what would they say?

2. Act together as one

Some quotes from a recent survey of UK charities:
Keep it genuine – values are not a marketing gimmick
Do not think of them as just a list to publish – embed them in
everything you do from meeting agendas to policy templates
Live them or lose them
Put ‘have we lived up to our values this month’ on the agenda

3. Reach out to others

Clear and meaningful values are a like a magnet
• Where your organisation’s values are aligned with people’s
personal values, those people are likely to engage with you
– so values can build your financial support and activism
• Values are central to effective partnerships, alliances and
movements
• Meeting people where they’re at is key to success, this is
not a one-way exchange
 How do values feature in your organisation’s outreach?

Avoid meddling with values

If your organisation doesn’t have a set of values, or if they’re
not clear or meaningful enough, then beware …
• Values are deep-seated and personal
• In organisations where there aren’t shared values, people
often assume their own values are at its heart
• Perceived changes to values are essentially changes to the
organisational culture
 Don’t jump in – a robust and inclusive approach is
advisable, in order that any new values actually stick

Good Governance

Values run through the Code, for example Boards:
• Safeguard the vision and values of the organisation
• Ensure that the organisation’s values and ethos are
enshrined in its polices and practices
• Ensure that any statement made on behalf of the
organisation is consistent with its vision, mission and values
More broadly, Trustees are effectively values guardians:
– You’re typically around longer, providing continuity
– You can stand above the many external pressures to change
– You act in the long-term interests of the organisation

Good governance

Another exercise in your pairs:
If the Board is the guardian of an organisation’s values, then
what should it do to fulfil that role?

We’re looking for specific ideas and suggestions, and indeed
any good practice you can share

Discuss with your partner

Want to know more?

Living Values – a pocket guide for trustees: http://www.ncvo-
vol.org.uk/sites/default/files/UploadedFiles/NCVO/Publications/Publicatio
ns_Catalogue/Trustee_and_Governance/Living_Values_pocket_guide_PDF
.pdf

To practice what we preach – Cass research thought piece:
http://www.cass.city.ac.uk/research-and-faculty/centres/cass-centre-for-
charity-effectiveness/resources/thought-pieces

Common Cause – research and resources about public values:
http://valuesandframes.org/

Thanks … and do stay in touch

Donald Ritchie
donald.ritchie @ncvo-vol.org.uk
020 7520 2508
http://www.ncvo-vol.org.uk/consultancy

AM3: Employment
law for trustees
Vicky Cook
BWB Associate

Overview

 Handling restructures and redundancies
 Handling appeals

Restructuring

 Will restructuring result in redundancy?
 No redundancy if restructure involves a
redistribution of the same work amongst
employees whose numbers remain the
same

Restructuring cont …

 Depends on number of factors:
 reasons for restructuring (hours, pay, new
role)
 flexibility of job description
 is it a change to the work or to how the
work is performed?

Imposing changes to terms and conditions
as part of a reorganisation

 Consent
 Consultation
 Business necessity/sound good business
reason
 Not necessary that business will come to a
standstill

Dismissal in order to implement a
reorganisation
 Employer must demonstrate that it has
discernible advantage
 Interest of employees cannot be ignored where
there is a sound and good business reason for a
dismissal
 Has employee acted reasonably in refusing the
change?
 Reason for dismissal – SOSR?
 No redundancy pay
 Appeal

Redundancy

 Disappearing work
 Disappearing job or workplace
 Business requirements for work of a
particular kind have ceased or diminished
 Can be temporary change

Avoiding redundancy

 Voluntary redundancy
 Job share
 Reduced hours
 Pay freeze
 Career breaks
 Secondments
 Talk to staff
 Be creative

Redundancy Process
 Individual consultation on draft proposal
 Confirmation of proposal
 At risk meeting
 Selection process
 Formal meeting to discuss redundancy and
outcome
 Alternative employment
 Notice
 Appeal

Collective consultation

 20 99 employees within 90 days = 30
days‟ consultation
 100 + employees within 90 days = 90 days‟
consultation
 Consultation = with employee
representatives

N.B. notification to BIS

Selection

 Selection for redundancy, (not for alternative
employment)
 Two main issues:
 selection pool
 selection criteria

Pool

 Is there an agreed procedure?
 Type of work similar?
 Interchangeable skills
 Apply mind, but good deal of flexibility
 Band of reasonable responses

Selection Criteria

 Consult on criteria
 Objective and consistent
 Commonly used criteria:
 last in/first out?
 skills and knowledge
 attendance
 disciplinary records
 Selecting out v. selecting in

Selection Process

 Individual or panel
 Interview or presentation
 Scores:
 individual has right to know scores
 details of scores should be provided before
meeting to allow consideration and appeal

Alternative Employment

 Employer must take reasonable steps to
find alternative employment for employees
who may be otherwise dismissed by way of
redundancy
 Selecting for alternatives is not the same
as selection for redundancy

Suitable alternative employment

 Who determines suitability?
 Offer?
 What if refused?
 Trial period and pitfalls
 Offer of part time work

Appeals

Purpose of Appeals

Ensuring

 Fair process/natural justice

 Requirement of ACAS Code

What is an Appeal?

 Re-Hearing?

 Review?

 Not an opportunity to increase sanction!

What is an Appeal? cont …

To:
 Clarify reason for dismissal

 Rectify previous procedural errors?

 New evidence?

 Is prior investigation required?

Who should attend?

 Chair of Appeal - more senior employee/
Trustee
 Panel?
 In person or in writing?
 Original decision-maker?
 Witnesses?

ACAS Guide on Appeals

 Applies to both grievance and disciplinary
appeals
 Timescale – no unreasonable delay
 Employees should put grounds of appeal in
writing
 Decided by manager not previously
involved (wherever possible)
 Informed of outcome as soon as possible

Consequences of failure to follow appeal

 Unfair dismissal?

 Breach of contract

 Breach of ACAS Code/Uplift

 Statutory requirements i.e. flexible working

Appeals within the redundancy process

 What is the employee entitled to appeal?
 The business decision?
 The conduct of consultation?
 Choice of employees in the pool?
 The selection criteria/scoring?
 Failure to consider/offer SAE?
 Other unfair aspects of the process?

Appeals within the redundancy process
cont …
 Timing of the appeal
 Is there a realistic possibility of the
redundancy being overturned?
 Position of others at risk?

The appeal outcome

 Deal with each point
 Use headings
 Reason for conclusions
 State what new evidence considered (if
any)
 Deal with any new grounds raised at the
hearing (between new evidence and
concessions)
 Make concessions if appropriate

The appeal outcome cont …

 Do end it appropriately
 Do not say employee can pursue this
matter in the Employment Tribunal!
 Go ahead with the appeal (if requested)
even if the employee has already lodged a
Tribunal claim
 Think how the outcome letter would sound
if read out in a Tribunal!

Vicky Cook
Associate Solicitor
Employment Department
Bates Wells & Braithwaite London LLP
2-6 Cannon Street
London EC4M 6YH
: 020 7551 7856
E-mail: v.cook@bwbllp.com

AM4: Practical financial
management for trustees
• Ian Mathieson, Head of Charities, PKF
• Vivien Ma, Audit Manager, PKF
• Richard Macey, Associate Director –
Charities, M&G

Practical financial management
for trustees –
adapting to survive
Insert client logo here
(or delete box)

Ian Mathieson, Head of Charities, PKF
Vivien Ma, Audit Manager, PKF
Richard Macey, Associate Director – Charities, M&G

www.pkf.co.uk © PKF (UK) LLP

Introduction

• Current
financial, operational and
investment trends affecting
the sector
• How some charities are
responding
• Good financial
management indicators for
trustees
• Investment matters
• What should trustees have
on their radar?
• Some key messages
• Questions

Some wise advice

“It is not the strongest of species that
survives, nor the most intelligent, but the
one that is most responsive to change.”
Charles Darwin


And some more…

“The problem with the future is that it is
different. If you are unable to think
differently, the future will always arrive as a
surprise.”
Professor Gary Hamel


What threatens your charity’s
survival?


Risks faced by charities

• Income • Safety
• Public policy • Competition
• Reputation • Partner/supplier
failure
• Staffing
• Quality/compliance • Lack of credit
• Cost increase • IT/data/technology
• Other


Income is the biggest worry
Graph 7: Top three risk areas cited (those with at least 1% as highest risk)


Stakeholders demand more
Graph 26: Increased stake holder demand for performance information

% of
charities

Subsector


Public policy is hurting many
Graph 8: Impact of public policy for those with more than 20 respondents
only

% of
charities

Subsector


Also worth noting…..

• 44% of charities intended to utilise reserves over next two
years
• Demand for efficiency savings and different payment
mechanisms
• Cash constraints on unrestricted funds (potential breach
of trust issues)
• Management teams are stretched
• Fraud is on the increase
• Pension deficits are getting worse


Charities are responding by:

• Income generation
– Diversifying income streams
– More trading income
– Investment strategies

• Reducing costs
– Reviewing cost structures
– Working with others


Charities are responding by… (continued)

• Creating new ways to deliver services
– Refining beneficiary group
– Moving towards social enterprise
– Change, innovation and focus

• Better financial management
– Cash flow forecast
– Scenario planning
– Internal controls
– Reserves policy


Income generation

• Fundraising strategies
– Trading – merchandising, sales of donated
goods, social enterprises
– Public donations – major donors, fundraising events
• Extending services from UK to overseas markets
• Thinking creatively about using available assets – renting
spare space, creating consultancy income and so on
• Trading subsidiary?
• Tax planning
• Investment strategies


Working in partnership with others

• 59% of charities have externalised some areas of
activities in the last two years
• Models used include outsourcing, partnerships and
shared services
• Major drivers are improved quality, access to
skills, reduced cost and joining up service provision
• Only 50% of charities were happy that the arrangement
had delivered the expected benefit
• 20% did not know whether the arrangement was delivered
the expected benefit or not (!)
• Remember – working with others brings its own risks!


New ways of service delivery

• Social enterprise as a route to scaling up and financial
sustainability
• Joint venture with commercial organisations to fulfill
charitable purpose
• Moving to a commercial model for a previously public
funded service


Good financial management indicators for trustees?

• Cashflow

• Going concern

• Scenario planning

• Internal controls – fraud risk factors

• Reserves policies

• Signs of operational stretch

• Changing risks


Cashflow

• Organisations fail through lack of cash, not lack of
operating surplus / reserves
• Also need to be aware of the unrestricted / restricted cash
split
• What information are your trustees receiving on cashflow?
– How regularly?
– Period covered?
– Are the key variables and cashflow risks clear?
– Cashflow management processes?
• All organisations need a closer control over cash in
difficult times; ensure these basic processes are in place
and under control in your charity


Going concern issues
• Auditors looking very carefully at the robustness of going
concern assumptions, operational plans and supporting
evidence (at audit planning and completion)
• Under auditing standards – duty lies first with the trustees to
satisfy themselves over the going concern basis
• One year from the date of signing the accounts, not the year
end
• Cashflow is key – minimum of 12 months from signing split
across restricted and unrestricted funds
• Potential for trustees to be in breach of trust where using
restricted funds for unrestricted purposes. Review your net
asset funds note
• Have you seen all the evidence you need? Letter of
Representation – are your senior management team happy for
you to sign it?

Scenario planning

• Questions for trustees:
– What scenario planning has taken place in your
organisation?
– Who was involved?
– How often is it renewed?
– Balance of external / internal information used?
– Conservative / wild and whacky scenarios?
– Is it clear what action needs to be taken and when in
each case?
– How will you know which scenario is panning out and
therefore when actions need to be triggered?


Internal controls – fraud risk factors
Risk of fraud is heightened in times of economic downturn:
• Controls over company credit cards
• Expenses policy – self certification at the top?
• Access to internet banking and controls over payments
(including payroll)
• Duplicate payments & dummy invoices
• Fraudulent changes to supplier details (and collusion)
• Controls over access to systems by leavers (watch your security
over data)
Many frauds are not complicated; they are perpetrated at a
basic transactional level and can be guarded against by good
controls and by all staff being alert for the signs of a potential
fraud
• And the typical fraudster is?


Fraud risk

– Do you have a clear strategy in place to reduce fraud
within your organisation?
– Do you measure and monitor the risk and the cost of
fraud in some way?
– Is there a clear counter fraud culture in place within the
organisation?
– Is there a clear whistle blowing policy in place?
– Are firm, rapid actions taken if fraud is discovered?
– Is detection and prevention of fraud built into
controls, systems and processes?
– Do fraud issues get discussed at board level?
– Do you periodically assess the effectiveness of your
approach to fraud?


Reserves policy

• Why do charities hold reserves?
– to fund working capital
– to fund unexpected expenditure, for example when
projects overrun or unplanned events occur
– to fund shortfalls in income, when income does not
reach expected levels
• Current reserves level – what are your free reserves?
– Exclude those that cannot be turned into cash quickly
e.g. fixed assets
– Exclude restricted funds
• What reserves does your charity need i.e. what are your
charity‟s rainy days?


Reserves policy (continued)
Questions for trustees:
• When did you last revisit your reserves policy?
• Does it remain appropriate to your charity‟s changing
needs?
• Is it clear how you plan to manage any gap between
current reserves levels and reserves targets?
• How often do reserves levels get discussed at trustee
meetings?
• Are the links to the risk register and your strategic
direction clear and well understood?
• Have a good look at your restricted funds – can you use
them better whilst complying with their terms and
conditions?


Signs of operational stretch

• Change management + keeping the show on the road =
potential operational stretch
• Your senior management team are key; they need to be
supported and challenged – balance is important
• How can you address operational overstretch?
– Just do the important stuff
– Postpone less important things
– Do things differently
– Get more resources
– Use trustees & volunteer skills and commitment
• Watch out for the warning signs
• Discussions with auditors


Changing Risks

– When did you last see your risk register?
– Does it reflect the key risks the organisation now
faces?
– Is it clear what the key risks are, how they are being
managed and how they are being monitored?
– How often do trustees receive a report on
organisational risk?
– What actions are taken when a heightened risk is
identified?
– Who is scanning the horizon – is anyone looking
across sectors?


Investment matters


Valuation signals, 2000 versus 2012
Sample of assets, showing real yield against an assessment of neutrality

12
Undervalued?

2000 Current Neutrality
10

8
Real yield (%)

6

4

2

0

Overvalued?
-2

Investment odds are in favour of equities

160 Source: M&G Investment Management Ltd. Real yield is defined as an inverted p/e ratio, using forward consensus data. As at 1 October 2012

Market timing – best and worst times
Nobody rings a bell at the top or bottom of the share price cycle

UK equities – 20 years to end February 2012
10
9 8.3
8
7
6 4.9
% pa 5

4
3 2.7
2 0.9
1
0
-1
-2 -0.8
-3
Fully invested throughout Missing 10 best days Missing 20 best days Missing 30 best days Missing 40 best days

Market timing increases risk – a risk that can be avoided
Prices may fluctuate and you may not get back your original investment
Past performance is not a guide to future performance

161 Source: Datastream and M&G, in sterling, income reinvested, as at 29 February 2012.

Taking a long-term view…..
Contribution to total returns
Breakdown of total US returns (real) for every 1 year and 5 year
period since 1871
100
90
80
70
60
50
%
40
30
20
10
0
1 year time horizon 5 year time horizon

Dividend yield Dividend growth Change in valuations

…..but you don’t have to wait a lifetime

162 Source: GMO, as at August 2010

Why dividend investing works
Dividends and share prices go hand in hand – they are not mutually exclusive!

Capital growth vs. total return: US returns over 10 years to December 2011
160
141
140

120
Return (%)

100
86
80

60

40 33

20 10
0
S&P500 Capital S&P500 Total Return Dividend Achievers Dividend Achievers
Return Capital Return Total Return

Consistent dividend payers deliver better share-price performance
…and investors receive the income on top

163 Source: Mergent‟s Dividend Achievers, as at 30 November 2011; Datastream as at 31 December 2011. US companies with a 25-year track record of consecutive dividend growth

Key messages
• Investment objectives – be clear on what you seek to
achieve, and review these regularly

• Keep it simple – avoid investing in products that you
don‟t understand

• Inflation is the real enemy; think long term – don‟t
obsess about benchmarks and short-term volatility!

• Income & income growth remains key – for cash and
total return

• Equities are more attractively valued than bonds or
property – patience is a virtue

• Prices will fluctuate and you may not get back
your original investment

164

Keep on your radar

• Changing operational and regulatory environment – are
opportunities as well as challenges
(VAT, Real Time Information, auto - enrolment are good
examples)
• When things change – the routine can be overlooked and
internal controls can weaken
• Are our gift aid claims up to date? – easy money sitting
there for you to reclaim
• What are others doing across sector(s) – can this benefit
us?
• Remember there are a lot of opportunities out there for
your organisation (even if not always easy to find)


To sum up – some key messages

• Ask the right questions – even if they are difficult ones
• Trustees may need to challenge the sacred cows and
previously accepted wisdoms from management
• Take advice if you need it – use someone as a sounding
board
• Be aware of the risk of management stretch – remember
somewhere along the line it will always impact on the
finance team
• Identify the “must do‟s” and get those right
• Keep asking – is there a way we can use the assets and
resources currently employed in a better way?


A final thought…

“If you do what you’ve always done,
you’ll always get what you’ve always got.”
Anthony Robbins


Questions?


Contact us

• Ian Mathieson ian.mathieson@uk.pkf.com
020 7065 0399
• Vivien Ma vivien.ma@uk.pkf.com
020 7065 0735
• Richard Macey richard.macey@MandG.co.uk
020 7548 3731

PKF (UK) LLP
Farringdon Place, 20 Farringdon Road, London EC1M 3AP

M&G Investments
Governors House, 5 Laurence Pountney Hill, London EC4R 0HH


AM5: The challenges faced by
chairs

• Dorothy Dalton, Governance
magazine editor
• Steve Powell, Sign Health CEO

The role of the chair of trustees
• To provide leadership to the board and to
ensure that trustees fulfil their duties and
responsibilities for the proper governance of
the charity.
• To support and where appropriate, to
constructively challenge the chief executive and
to ensure that the board as a whole works in
partnership with executive staff.

Main challenges

•Processes
•Behaviours

Complying with governing documents

Proper process for identifying new
trustees

Introducing limited terms of office

Agreeing the charity’s values

Planning the way ahead and adapting
to rapidly changing times

Keeping meetings business-like and
effective

Trustees who never read the board
papers

Dominating or controlling trustee

Trustees unable to raise difficult or
sensitive issues

The board micro-managing the chief
executive

Private meetings of the board being
misused

Members and managing democracy

Dorothy Dalton
dalton.dorothy@btopenworld.com
020 8426 6686
07777 660356
www.dorothydaltongovernance.com
Cartoons by Anthony Kelly www.anthonykelly.co.uk

a) TO GO OR NOT TO GO?

The Chief Executive has been with the charity for over
12 years. In the first 5 years the charity grew in
income and activity largely due to the energy, efforts
and vision of the Chief Executive. In the next 5 years
growth and activity tailed off and this was explained
as ‘consolidation’ and due to market pressures.
Trustees had raised their concerns at the last Strategic
Review and two years on things are not getting
better.

There are now mumblings that a change in CEO is
required.

a) TO GO OR NOT TO GO? Cont……

1. The CEO has the strong support of the
SMT and staff
2. The CEO is the recognised ‘face’ of
the charity
3. The CEO has a close friendship with
at least two of the Trustees, going on
holiday together, and their children
being close friends

b) BANGING HEADS TOGETHER

The outgoing Chair of Trustees was a kind, democratic but
uninspiring leader. The Board has split into two factions, one
group thinking they should merge with another charity, the
other group resistant to any new ideas. Each side has a
forceful spokesperson.

You have discussed this problem with the CEO who isn’t
convinced merger is the right move, especially given the
Board’s differing views which would make negotiation with
any other charity impossible. The charity is financially
sound, has a good staff team but is hampered in its well
respected work by the squabbling within the Board.

You have been appointed from the outside as Interim Chair to
try and resolve matters.

b) BANGING HEADS TOGETHER Cont……

1. Some Trustees have been on the Board for
many years
2. The auditors have questioned the high
costs of the monthly Board meetings which
involve travel and overnight expenses
3. The squabbling has now come to the
attention of a funder of the Charity who is
likely to withdraw unless these difficulties
can be resolved

c) KEEPING A FIRM GRIP ON THE BOARD

•The charity is led by a strong and experienced
CEO. The senior management team work well
together and are delivering against the
organisation’s strategic objectives. The charity is
financially strong, respected and has excellent
internal controls
•
•However, one or two members of the Board seem
to find every opportunity to criticise the CEO or the
team. Those Board members also have conflicts
of interest, which they have declared, but it still
doesn’t stop them finding fault whenever possible.
When challenged they answer that the Board’s
role is to scrutinize the Executive. The Chief
Executive is looking to you for a resolution

c) KEEPING A FIRM GRIP ON THE BOARD
cont ….

1. The two Board members causing
these problems are elected from
the membership
2. The vice-chair who is responsible for
the Board’s Governance is weak
and ineffectual
3. The CEO has hinted that unless
something is done soon he will
make a formal complaint or walk

d) TRUSTEE NON-ATTENDANCE

• We have a trustee who last attended a board meeting in
2009. However, he always sends apologies for board
meetings on the grounds that he is too busy and the distance
to board meetings is a problem. He lives 300 miles away

• He is a property expert who has saved our charity many
hundreds of thousands of pounds with his negotiating skills
and his property expertise. Property matters excite him and
he travels long distances whenever we need his specialist
skills and he then gives unstintingly of this time. He is
invaluable to the charity

• A couple of years ago, the chair spoke to him gently about
attendance at board meetings and he almost resigned. He
indicated that it is because he is a trustee, that he gives us so
much of his time on property matters.

d) TRUSTEE NON-ATTENDANCE Cont……

1. In the next year or two the Charity will
have outgrown its office space

2. The Charity is a national body with
projects in Scotland and N. Ireland

3. Board meetings start at 10.30 am and
have always been in London

e) RESCUE OR TAKE-OVER

• For various reasons this charity has built up a substantial overdraft at
the bank, secured by a charge on one of its two buildings, both of
which are essential to the service provision side of its work.
• Recently (and the week the new chair took up the post) the bank
refused an increase in the overdraft facility and the charity was on
the brink of insolvency. Suddenly out of the blue, the parent of one
of the service users (a very successful business woman) has offered
the charity a massive interest free loan secured by taking a charge
on the charity’s second building. In addition she insists that she and
another successful businessman become trustees and between them
run (as chair and vice chair) the finance committee which must be
given significantly increased delegated authority. She says that the
two of them will transform us into a viable and thriving charitable
business. Because her son is a very contented resident in one of our
homes, she naturally wants the charity to flourish. Our two buildings
are our only assets
• However the chair is very concerned that this is a take-over in all but
name and that the board of trustees and the chief executive will, in
effect, be totally disempowered. Trustees seem oblivious to the risks
and are eager to find any solution to the financial problems. Many of
their family members are service users

e) RESCUE OR TAKE-OVER Cont……

1. The Memorandum and Articles of
Association haven’t been updated
for some years

2. The new Chair was appointed for
his skills in ‘turn round’ and
fundraising

3. The Charity has had some early
stage talks with another similar but
larger Charity

f) BREACHING CONFIDENTIALITY

• The chair of trustees was recently appointed having been a trustee of
the charity for five years. There has been a problem of confidential
information leaking from the board. This has ranged from a senior
member of staff being warned that action was to be taken by the chief
executive (CE) with regard to her under-performance despite support
and training, to a branch of the charity being informed that the cost-
saving axe was about to fall quite heavily on it when the matter was still
very confidential. Anecdotal evidence points to a particular trustee

• The previous chair discussed the issue with trustees when the trustee
concerned was not present and during a closed session of the board
(i.e. without the chief executive and senior staff). As a result the former
chair raised the matter with the trustee who denied the accusation
vehemently and accused the CE of deliberately trying to get him off the
board because he asks too many searching questions

• Things went quiet for a while but there has just been another significant
disclosure of confidential information about a very sensitive issue with
potential reputational risk to the charity. The evidence points to the
same trustee and the board expects the new chair to take firm decisive
action to stop the leaks

f) BREACHING CONFIDENTIALITY cont…

1. A past suggestion from the CEO that
the Board review its governance and
the election process wasn’t well
received.
2. The accused Trustee does have some
friends on the Board
3. It is likely the accused will see
themselves as a whistleblower, saying
they were acting in the best interests
of the charity.

g) MAIL ON SUNDAY DISCLOSING FRAUD
• The Finance Director (FD) has been at the charity for many years
and has worked very successfully with four different chairs of
trustees. He is highly regarded and trusted implicitly by the
board, the chief executive and the rest of the staff

• A bright young graduate joins the finance team as its most junior
member on a salary of just £15,000. She notices some unusual
payments being made to a company and decides to make some
discrete enquiries. She finds that the company secretary is the FD’s
brother and that the two of them are the only shareholders. She
finds ten payments totaling £100,000

• Not knowing who in the charity she should take her findings
to, she decides to take her story and the evidence to the Mail on
Sunday. The first the chair hears of the matter is when the Director
of Communications phones on the Thursday to say The Mail on
Sunday wants a statement before they publish on Sunday about
the hundreds of thousands of that have been defrauded.

g) MAIL ON SUNDAY DISCLOSING FRAUD cont…

1. The CEO is currently overseas on
holiday

2. The auditors have always given the
charity a clean bill of health although
the same auditor has been used for
sometime

3. The Chair wants to avoid reputational
damage, at all cost.

h) TRUSTEE WHO TRYS TO OVERTURN BOARD DECISIONS

• Kate is a good and loyal trustee who gives to the charity in a
number of different ways. She has been a regular and very loyal
volunteer who is always prepared to go the extra mile. As a
trustee she also uses her professional expertise to assist the
charity. She does all this while managing her own business and
bringing up two teenage children. She is passionate about the
work of the charity which did so much to help her much loved
father

• At board meetings she joins discussions with enthusiasm and is
very articulate but has very fixed views. When a board decision
goes against her, she will just not let the matter lie. At the following
meeting she will raise the issue again when the minutes of the
previous meeting are considered and will try to get to the board to
reverse its decision. If this doesn’t succeed, she will bend any
issue being discussed so that it goes back to the decision which
she wants over-turned. She just won’t let go

h) TRUSTEE WHO TRYS TO OVERTURN DECISIONS cont…

1. Kate has a very engaging personality
and is generally liked by the Board
2. She has good relationships with the
CEO and SMT although her
stubbornness does show, and she is
inclined to bring board discussions into
operational matters
3. The Chair (male) doesn’t know how to
handle a powerful personality such as
Kate and so has been ineffective

AM6: Three in one charity
update – Charity
Commission, legal and
pensions • Christine Rigby, BWB solicitor
• Nick Mott, Charity Commission Head
of Policy
• Mark Brown, Lucas Fettes Director

Charity Commission
Update 2012
Nick Mott
Neal Green

12 November 2012

Reviews and big ideas

• Lord Hodgson‟s review
• NAO report and PASC review
• Law Commission Review
• Promotion of alternative civil society forms and
funding:
– mutuals
– social enterprise
– social investment
• Perceptions of the Commission - Tribunal
decisions on public benefit (and others)

Charity sector – how big?

Number of charities
13,000

162,000

180,000 Registered

Exepted and Small

Exempt

Based on Charity Commission and NAO data, 2012

Charity sector – how much?

Income of Charities (bn)
£70.0

£60.0 £58.6

£50.0 £47.0

£40.0

£30.0

£20.0

£10.0

£0.4
£0.0

Registered Excepted and Small Exempt (known)

Based on Charity Commission and NAO data, 2012

Some big issues

• Pensions
• Charities and education
• Charities‟ relationships with government
• Funding and fundraising
• Independence

Our latest research – how is
trustee recruitment?
Amongst new organisations applying to register:
• 34% wanted more trustees; 26% had difficulties recruiting
• trustees most commonly recruited from
– existing staff, volunteers, members
– personal contacts
– word of mouth
• Over half try to recruit trustees from different backgrounds
• Over 70% try to identify and meet skills needs when
recruiting
• 63% offer some training and support for trustees (20%
said „comprehensive‟)

Our latest research – how is
governance?
New organisations applying to register:
• Use a variety of sources of support and advice
• Mostly do not benefit trustees (only 2% pay any trustees
for serving)
• Mostly (over half) felt that managed risk-taking is
necessary
• Mostly (95%) agreed that the trustees‟ role is about
governing the organisation
– 51% of respondents said trustees set vision and strategy,
delegating delivery to others
– 22% said their trustees also manage the organisation day to day
– A further 22% said their trustees more or less do everything

New strategic plan

• Developing compliance & accountability
• Developing self-reliance
• Being effective in the way we do things

Developing self-reliance

• Self-reliance of trustees
– Improving online guidance and information for trustees
– Improving online services

• Self-reliance of the sector
– Working with umbrella bodies – e.g. shortly re-launching
quality standards accreditation programme

Trustee decision making

• Planned guidance
• To help trustees make sound decisions
• To give them confidence about doing so
• Reinforcing that you don‟t always need to ask the
Commission
• Explaining the legal principles
• Informal consultation later this year

Developing accountability

• Ensuring charities file documents online and on
time
• Improving online register, e.g. new advanced
search functions, new top ten lists, new mobile
version of the website.
• Asking the sector and public – what information
about charities to do you expect from regulator?

Accounts filing: latest figures

• 86% charities filed accounts on time in 2011-12

• 83% charities filed annual returns on time

• 4683 charities filed accounts* more than 30 days late

* charities with incomes < £25 k not required to file
accounts

Late filing: the warning signs

• Late filers tend to be repeat offenders
• Not just small charities
• No evidence that late filing is caused by financial
problems
• Correlation between poor quality accounts and late
filing
• More than 1/3 of defaulters had prepared and signed
accounts within deadline
• 39% of late filers filed on time with Companies
House

Developing compliance

Ensuring trustees comply with charity law, by:

• being proactive in preventing problems occurring in
the first place
• taking timely action where serious problems arise
• coordinating with other agencies

Charities Back on Track 2012

Common areas of concern

• Trusteeship issues/serious governance concerns (58
of 85 investigations)
• Accounting issues (26 of 85)
• Disputes (19 of 85)
• Fraud allegations (18 of 85)
• Vulnerable beneficiaries (11 of 85)

Charities Back on Track 2012

1,027 reports of serious incidents (RSIs)
121 reports from whistle-blowers
1,374 assessments*
5,000 First contact & Operations cases**
85 investigations completed
9 statutory inquiries
* April-December 2011 **December 2011- March 2012

Being effective - New risk
framework

Do we need to engage?
– is issue within our remit?
– is another agency better placed to respond?
– could guidance resolve issue?

What’s the level of risk?
– e.g. challenge to integrity of charity status?
– beneficiaries, assets at risk?
– do trustees have capacity to resolve problem?

What’s the most effective response?
– only most serious cases dealt with as statutory inquiries

Being effective – what’s most
important?

• Dealing with fraud, financial crime and financial
abuse
• Dealing with safeguarding children and vulnerable
adults issues
• Counter-terrorism strategy

What we’re doing

Our main activities are still mostly unchanged:
• Online guidance
• Registration
• Advice and permissions
• Investigation and enforcement
• Supporting sector initiatives:
– The Code of Governance
– Trustees‟ Week
• Policy research

What we’ve done

• 5,601 new charities registered
• 85 investigations (9 statutory inquiries) completed
• 213,022 emails, letters and phone calls dealt with
• 1,191 Freedom of Information requests
• 43m page views of our website (6m views of
charities‟ details)

Guidance

• Public benefit consultation
• Disaster appeals
• Financial controls
• Exempt charities
• Research
• Community Interest Companies
• Charitable Incorporated Organisations

Research this year

• Governance of organisations seeking registration
• Charity governance in Wales
• Charity reserves and reporting them
• Public trust and confidence in charities
• Impact of the public benefit requirement
• Profiling charities that file late

Questions?

NCVO / BWB Trustees’ Conference 2012

What we will cover

 New legislation
 Lord Hodgson‟s review
 Recent cases
 Charitable Incorporated Organisation
 Scotland and Northern Ireland

Charities Act 2011

 Charities Acts 1993 and 2006 consolidated
into Charities Act 2011 (but not 1992 Act)
 Came into force March 2012
 No substantive change to the law – just
changes to section numbers

Review of 2006 Act

 November 2011 - Lord
Hodgson appointed to
lead the review process

 Report published July
2012

Timescales for any changes

 Government expected to respond before
Christmas
 Non-political changes – possible legislation
in 2015
 Political changes – in the hands of the
Cabinet Office

Headline issues for trustees

 Payment of trustees – charities with
income over £1m to have an automatic
power to pay trustees
 No changes to protect trustees of
unincorporated charities
 Recommendation that charity legislation
should include a trustee‟s “right to
information”
 Good practice “cap” on trustees serving
more than three terms

Headline issues for charities

 Charging by the Charity Commission
 Raising the threshold for registration to
£25k
 For larger charities, scrapping the
Summary Information Return
 Tighter self regulation of fundraising
 Sector committee to progress reform of
public collections

Recent cases

 Davies -v- Barnes Webster & Sons Ltd –
unincorporated sports club – Chair of
management committee sued personally for
money owed on building contract
 White –v- Williams – schism in a religious
charity. Some trustees held to have breached
their duties - Judge refused them an indemnity
out of the trust‟s assets for legal and other
fees incurred during the dispute

 Wedgwood – were the assets of the
Wedgwood Charity available to pension
fund creditors? On the facts, yes.
 Friends of Burbage School Limited –v-
Woodhams – Fundraising auction – extent
to which trustee was liable for services he
had arranged (and an unintended bid…)

The Charitable Incorporated Organisation
– are we nearly there yet?
 Expected before the end of 2012
 Phased implementation:
 Initially “Brand new” charities with £5k income
 March 2013 Unincorporated with income
over £250k
 May 2013 Unincorporated with income
over £100k
 July 2013 Unincorporated with income
over £25k
 Oct 2013 Unincorporated charities with
income over £5k
 Jan 2014 All new and unincorporated charities

Should you/shouldn‟t you?

Pros:
 Bespoke charity vehicle
 Just one regulator
 No need to reconcile charity and company law
requirements

Cons:
 Untested – may be teething problems
 No register of charges may mean lenders are wary

Across the borders

 Scotland
 SCIO already available in Scotland
 OSCR about to review 40 fee charging schools
 Possible legislation in 2013 to give separate
legal personality to unincorporated
associations
Northern Ireland
 Registration with CCNI due to commence
Autumn 2013

Any questions?

Christine Rigby
Tel: 020 7551 7712
c.rigby@bwbllp.com

Bates Wells & Braithwaite London LLP
2-6 Cannon Street
London EC4M 6YH

Mark Brown
Director & Head of Financial Services

Lucas Fettes & Partners

Employee Benefit Consultants and
Independent Financial Planners

Appointed to deliver pensions solution for
NCVO members in April 2011

Contents

Duties

Your
Organisation

Options &
Timescales
Costs

Duties

Operate a qualifying pension scheme

Auto-enrol certain workers

Make contributions

Provide information

Compliance

Where to start

Consider what you want
to achieve

Do I want to help my
I merely want to meet my
employees save and plan for a OR minimum legal requirements?
better retirement?

Timescales - Staging Dates

Employer type When

Large: 250+ employees 1st Oct 2012 to 1st Feb 2014

Medium: 50–249 employees 1st April 2014 to 1st April 2015

Small and Micro: 1-49 employees 1st August 2015 to 1st April 2017

Workplace Pension Options

1 2
Consider
Tailor Establish
existing new scheme Scheme structure and
scheme (e.g. GPP) governance
Investment options and
default fund
Use Master
Trust scheme Administration
(e.g. NEST)
Member communications
3

Costs

Minimum contributions

Employer Employee Tax relief Total

1% 0.8% 0.2% 2% until Oct 2017

2% 2.4% 0.6% 5% until Oct 2018

3% 4% 1% 8% from Oct 2018

Compliance and administration

Advice and guidance

Action Plan

Establish your staging date Now

Profile workforce and quantify impact 12-18 months

Agree strategy and scheme design 9-12 months

Review HR/Admin functions 6-9 months

Test systems and processes 3-6 months

Communicate and Implement 0-3 months

Further Information

Pension Reform – A Guide for Trustees

www.lucasfettes.co.uk/pension-reforms

www.scottishwidows.co.uk/NCVO

For more information or a copy of our slides please call
0845 357 8910 or email pensionreform@lucasfettes.co.uk

This presentation has been prepared based on our current understanding of UK taxation, Law and HMRC Practice.

Lucas Fettes & Partners (Financial Services) Limited is an Independent Financial Adviser authorised and regulated by
the Financial Services Authority (FSA) FSA no. 146279.

PM1: Next steps for
vountary action
Karl
Wilding, NCVO

The Road Ahead?

Planning for the Voluntary Sector Operating
Environment 2012-2015

Karl Wilding
NCVO Policy & Research | November 2012
www.ncvo-vol.org.uk 258

A strategic planning cycle

Getting the direction right

Evaluation Strategic analysis

Implementation
Options and choices

Planning

Considering implications

What? = scanning the external environment to identify and
prioritise the drivers

So what? = considering the implications for your organisation and
key stakeholders, spotting opportunities (and threats and
risks)
Now what? = considering the next steps your organisation might want
to take:
honing the opportunities down
creating some strategic options
making decisions about future plans

The PEST/PESTEL Framework

Political
Economic
Socio-cultural
Technological
Environmental
Legal

Key steps

1. Map the drivers that could impact your organisation
2. Sort them into the vital, the important and the
interesting
3. Carry out further research into the drivers that matter
4. Consider the implications of these drivers and
generate opportunities and options (scenarios)
5. Take strategic action – make decisions about your
response

The voluntary sector economy

263


1. Falling income, rising costs, higher
expenditure to meet greater need.
2. Giving stable, but for how long? Still
£900m below 2007/08 peak
3. Government contracts still increasing?
Grants £2 billion less than in peak of
2003/04.
4. More trouble to come? Austerity till
2018
5. Social investment: high profile but
remains niche

Source of income to voluntary organisations, 2000/01 to 2009/10 (£ billions)

Source: NCVO/TSRC, Charity
Commission

Plugging the deficit: Govt plans

£10bn more
benefit cuts

Source: IFS http://www.ifs.org.uk/budgets/budget2012/
budget2012carlemmerson.pdf

Voluntary sector policy environment

Voluntary sector policy environment

1. Government approach: „showing
not telling‟, „local not national‟
2. Changing landscape: more
emphasis on frontline
4. Public services: payment by
results, level playing field?
5. Focus on delivery: Localism Act;
social value; Big Society Capital;
mutualisation

Key VS policy issues
1. Public services
• Social value Act
2. Localism
• Right to challenge
• Right to bid
3. Charity Law & regulation
• Fundraising
• Public benefit
• Role of the charity commission
4. Funding & finance issues
• Giving & taxation
• Social investment

Social attitudes

Attitudes towards taxation
and spending 2000-10
(%)
(Source: British Social Attitudes Survey 29, 2012)

Social attitudes
1. Inequality and fairness still important narratives: but
social attitudes are hardening
74% agree the income gap between rich and poor is too large
34% believe government should take steps to redistribute
wealth

2. Less support for collective public services?
Support for increasing taxes and spending more on health,
education and social benefits has decreased from 51 % in
2000, to just 30% in 2010

3. And public support for the welfare state?
63% believed parents who "don't want to work" were a reason
why some children lived in poverty
55% believe unemployment benefits are too high and that
they discourage those out of work from finding new jobs

Source: British Social Attitudes

Technological change
1. Mobile devices primary device for connecting with
internet for increasing number of people
Smartphones are predicted to overtake standard
mobile phones in 2012
Mobile app downloads will rise from 10.7bn in 2010 to
182.7bn in 2015

2. New ways to pay and give?: NFC payment, new web
and mobile payment technologies, group buying,
crowdfunding

3. Mainstream: social media, social analytics, cloud
computing/storage

4. Rising interest in „Big Data‟ and open data

5. Social action and technology: still very much focus of
innovation in our sector

So what?: Opening up thinking

• External:
• Users and their needs
• Funders and their priorities
• Relationships and influence (other players, policy
makers etc)

• Internal:
• Workforce (paid, volunteer, trustees)
• Your work (services and activities)
• Governance (including accountability and evaluation)
• Systems and skills (including communication,
administration etc)

Taking action

What? = scanning the external environment to identify and
prioritise the drivers

So what? = considering the implications for your organisation and
key stakeholders, spotting opportunities (and threats and
risks)
Now what? = considering the next steps your organisation might want
to take:
honing the opportunities down
creating some strategic options
making decisions about future plans

Making decisions about how your
organisation will respond

This step in the process is about linking „so what?‟ and
„now what?‟ Making sure your organisation has…

• considered a healthy range of opportunities/threats
• developed a range of possible responses
• considered responses and decided which are the
most appropriate

Perhaps you could use the Improve, Innovate,
Improvise idea suggested earlier….

What are the implications for
your organisation?

Taking strategic action 1

Narrowing down responses…

What are the strengths and weakness of your
proposed responses to the drivers you have
identified?

On balance, which option/s work best for your
organisation?

Taking strategic action 2

Perhaps your organisation could think about….
• What is realistic and achievable in the next 3
years?
• Are there quick wins that could be made in
the next year?
• Are there ideas to capture but to be taken
forward in a more gradual way or agreed to
revisit at some later point?

The Road Ahead?

1. Rebalancing the economy: growth v austerity

2. The „squeezed voluntary sector‟

3. The new money: social finance and evolving business models

4. Political polarisation: the anti-welfare agenda

5. Accountability in a digital age

6. Data-driven social change

Thank you for engaging!

Twitter: @karlwilding
email: karl.wilding@ncvo-vol.org.uk
Phone: 0795 137 3511

NCVO Policy & Research | November 2012
www.ncvo-vol.org.uk 284

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