Transcript Document
Finance & Governance Forum
Managing Change 18th October 2012
Chair’s Introduction
Mark Palios
Doing What is Right When Things go Wrong
Hilary S Carty
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Overview
• Sensing what is Wrong • Judging what is Right • Just Do It!
• …………. Leadership Resilience
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Assumptions
• The answers are in the room • Opportunity to step back from the coalface • Draw from own/shared experiences • Reflect, Review and Refresh
Learn from Everything
• The Good • The Bad • The ‘Shouldn’t be shared’
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Leadership Resilience
• Recover quickly from setbacks • Absorb impact… and keep going • Spring back quickly into shape after being bent, stretched or deformed • Cope with stress and adversity • Drive forward the vision
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When Things Go Wrong
• Expectations Unmet • Early Warning Signs?
• …Emotional Intelligence
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So What’s Right?
• Finding Authenticity • • • • • Faith Trust Community Individual Freedom Ends? Or Means?
• Authenticity through Values
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Just Do It!
• Courage is • ….. not the absence of fear – it is the determination to act despite it.
• ….. a transaction with fear.
The Seven Acts of Courage
• • • • • • • Courage to dream Courage to see current reality Courage to confront Courage to be confronted Courage to learn Courage to be vulnerable Courage to act
Staub: The Seven Acts of Courage: Bold Leadership for a Wholehearted Life
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Working with Courage
• Judgement / Reputation / Personal Brand • Listen / Engage / Inspire / Enlist Support • Leadership…
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When Things Go Wrong
• Opportunity – new knowledge, new equilibrium, new strategies • • • • Reflection Emotional Intelligence Authenticity Courage • Leadership Resilience
Governance review
Fiona Twycross AM Former Head of Governance, Diabetes UK
Governance reviews
• • • • • (Why) do you need a governance review?
Steps to take: Case study of Diabetes UK ‘Banana skins’ (pitfalls and ways round them) What does success look like?
Moving on from a governance review
Do you need a governance review?
• • • Are your processes and structures getting in the way of what you are trying to achieve?
Is changing them likely to make you more likely to reach your goals?
Do you have the time and resources to carry out a review?
Steps to take
• • • • Plan a realistic timescale (we didn’t) Identify the problem and what impact it is having on your organisation Be clear (very clear) on what you are trying to achieve Benchmark with similar organisations but be clear what will work for you
Steps to take
• • • Consultation Consultation Consultation – Make sure you keep people on board (as far as possible) and that you understand and address stakeholder concerns
Plan realistic timescales
Identify the problem
• • • What is it that isn’t working?
How do you know it isn’t working?
What impact is it having?
Finance Committee Audit and Risk Committee England Advisory Council Northern Ireland Advisory Council
So what was wrong?
Board of Trustees
UK Advisory Council
Council of Healthcare Professionals Council of People Living with Diabetes
Governance Committee Research Committee Scotland Advisory Council Wales Advisory Council Task and finish groups Expert Working Groups Task and finish groups Decision making Advisory/engagement Involvement Network
You don’t need to continue exactly as before in the meantime • • • • Introduced Board audit Introduced Annual Review of Board performance Strengthened information we gave to prospective trustees and induction/training process Put elections on hold
Identifying what we needed
Appointed Board of Trustees
Learning from others
• • • • • Spoke to other organisations Research online ICSA documentation (eg on accountability) Advice from the experts Learning from others internally
Consultation, consultation, consultation
Be as open as you can
• • • • If you need to change for funding purposes, say it But where the changes also have wider benefits, also say that If you are having a consultation, be as open as you can about submissions Explain why points are/aren’t taken on board
Avoiding banana skins
• • • • • Lack of champions on Board Blockers Hidden opposition Don’t take it personally Don’t just change things for change’s sake
Life after governance reviews …
What does success look like?
• • • Felt simpler Not discussing governance any more All members on councils wanted to stay on
Break Time
Workshop session: Changing your Articles of Association
Tom Bruce Farrer & Co
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Workshop Objectives
Does your NGB need to update its Articles in light of changes brought in by the Companies Act 2006?
– – Focus on Board Composition The Sport England and UK Sport governance criteria for NGBs (2013 – 2017) Case Study: What does your NGB need to change in its Articles to comply?
– – – Drafting the changes and adopting new Articles How to draft the changes to your Board provisions Managing the transition from an existing Board to a new Board The process for adopting new Articles
1(a). Does your NGB need to update its Articles?
• • •
Memorandum of Association
– Name, Objects, Powers, Guarantee and Dissolution provisions now deemed to be included in the Articles
Board Composition
– Company Secretary no longer compulsory
Conflicts of Interest
– Directors with situational conflicts or conflicts with a proposed arrangement or transaction
1(b). Does your NGB need to update its Articles?
• • • •
General Meetings
– – – – AGM optional 14 days’ notice of general meetings 5% or more of your voting members can call a general meeting Chair casting vote (only if he/she had one prior to 1 October 2007 which is to be retained)
Proxies Written Resolutions Electronic Communications
2(a). Board Composition: Governance Criteria • Sport England and UK Sport governance criteria for NGBs (2013 – 2017) • • To be included in your NGB’s Articles: – Ideally the Board should not exceed 12 members – Terms of office should be limited, usually to a maximum of 2 x 4 years To be included in your NGB’s [Articles] / Rules / Bye Laws: – A balance of skills and experience on the Board – An open recruitment process to the Board – At least 25% of the Board and ideally 1/3 to be independent • Requirements to be met by October 2014
2(b). Board Composition: Case Study •
Organisation “NGB” has 20 Board members who are elected by its membership and can hold their positions for as long as they choose to. In order to comply with its funding requirements, NGB needs to change to a Board of 12 individuals, 6 of whom are elected by its membership and 6 of whom are appointed by the Board (of which at least 3 must be independent). All 12 directors must only be able to serve on the Board for 2 terms of 4 years before they are required to retire.
(A) What does NGB need to change in its Articles?
(B) NGB wants some of its existing Board members to continue on the new Board. Can NGB do this? If so, how?
(C) NGB may wish to apply the 2 x 4 year maximum term to existing Board members so they can’t be re-elected or appointed to the new Board. Can NGB do this? If so, what would the drafting in NGB’s revised Articles look like?
3(a). Drafting the Changes •
What does NGB need to change in its Articles?
– – – – Maximum of 12 Directors on the Board; 6 Directors to be elected by its membership; 6 Directors to be appointed by the Board (of which at least 3 must be independent); Maximum of 2 x 4 year terms for all 12 Directors.
3(b). Drafting the Changes
• • •
NGB wants some of its existing Board members to continue on the new Board. Can NGB do this? If so, how?
Yes. Transitional provisions can be included in the new Articles to manage the change from the existing Board to new Board.
For example: – All existing directors retire at the AGM at which the new Articles are adopted but are eligible for re-election / appointment;
OR
– Staged implementation: Board members retire but are eligible for re-election / appointment in rotation (e.g. 1 immediately, 1 at the AGM next year etc.) to avoid the sudden loss of a substantial number of the Board.
3(c). Drafting the Changes
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NGB may wish to apply the 2 x 4 year maximum term to existing Board members so they can’t be re-elected / appointed to the new Board. Can NGB do this? If so, what would the drafting in NGB’s revised Articles look like?
• Yes. Transitional drafting can be included in the new Articles to provide that a Director who has already served for at least 2 x 4 years will either: (a) not be eligible for re-election / appointment for any further terms; (b) be eligible for re-election / appointment for one further term of 4 years; or (c) be eligible for re-election / appointment for two further terms of 4 years.
• Should Board members be appointed / elected in rotation (e.g. 4 elected directors, 1 to be elected for a 4 year term at each AGM?) to manage the transition?
3(d). The process for adopting new Articles 1.
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– – Prepare draft revised Articles Working Party to draft first before a legal review?
Members’ consultation meeting?
Circulate draft revised Articles to your members with the notice of the general meeting or AGM and an explanatory note of the changes 75% majority needed to adopt the revised Articles – Articles to be effective immediately upon adoption?
Transitional provisions?
File prints of the resolution and the new Articles at Companies House
Tom Bruce Associate, Sports Group Farrer & Co LLP 66 Lincoln's Inn Fields London WC2A 3LH Tel: +44 (0)20 3375 7192
www.farrer.co.uk
Contact Details
Lunch Time
Governance News Update
Joy Tottman, Governance and Compliance Officer Sport and Recreation Alliance
Initiatives
• • • • • • Code of Good Governance – case studies Board Members for Sport Board Skills for Sport – working with the IOD Leadership Convention 2012 Legal Panel Framework Shared Services
Voluntary Code of Good Governance for the Sport and Recreation Sector Case Studies: 1. What do you want case-studies on?
2. Do you want to help us create a case-study on your organisation?
Board Members for Sport
• • • Launched on 25 th September 2012 Network of interested people 75+ Advertise to the full network or to targeted skill sets within it 3.
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Tell us: The skills you are in need of?
Would you be interested to present to the network at a future event?
Do you have links with companies to help us expand the network?
Board Skills for Sport
• • First bespoke training course for board members in sport and recreation organisations.
Fully booked for January – setting up a second date – waiting list 1.
2.
Tell us: What is it important for Day 2 to cover?
Do you want us to explore bespoke courses for your full Board with IOD?
Leadership Convention 2012
• • • • • 14/15 November – Stratford Upon Avon 100+ booked on already Chairs and Chief Executives Theme = ‘Innovative Leadership’ Session specifically for Chairs It’s just a wonderful opportunity to be in a relaxed environment with so many key influencers in the sports sector 1.
Tell us: What topics do Chairs need us to work with them on?
Legal Panel Framework
• • • • 20 minute free helpline for all organisations Pro-bono legal fund – applications open Newsletter Conference – 4 th December – Leicester – book your place!
1.
Tell us: What topics do you want covered in the legal workshops?
Services and Support
• • • • Payroll – BOND HR assistance - SHE Q Research - SRA Administrative Support - SRA 1.
Tell us: What other services do you want us to look into for you?
Governance News Update
Amanda Bennett UK Sport
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UK Sport Update
Rio planning • Rio Investment Panels underway – thank you • 2013-17 funding triggers and required standards • Governance support • Dedicated Governance Manager • Support for Governance improvement - based on business case • Equality and Safeguarding funded support – individual 2013-17 targets
UK Sport Update
• Leadership development • UK-wide initiative with Home Country Sports Councils • Broad range of activities and support tools, e.g. Board evaluation and skills audit • Build skills and competencies which complement corporate governance frameworks • Working with SE and SRA to maximise impact
Governance News Update
Hilary Milne Head of Audit, Risk and Governance Sport England
Future direction?
Next steps………
• • • • • • Governance strategy Governance understandings, Preliminary assessments, action plans etc Self-assurance Audit and assurance process Thematic review Club governance
Questions?
Reserves and Reserves Policies
Jeremy Beard Partner, haysmacintyre 020 7969 5503 [email protected]
Reserves and Reserves Policies
• Definition of “Reserves” • Net assets • Liquid assets/free reserves • Liabilities and deferred income • Why hold reserves?
• To meet future commitments • Liabilities arising on winding up • To cover short term reduced income • To cover short term increased expenditure
Reserves and Reserves Policies
• Reserves Policy • Reasons why • Level of reserves or range • Steps to establish or maintain reserves • Arrangements for monitoring • Scrutiny of Reserves Policy • Funders • Members • General public
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Reserves and Reserves Policies
Setting a Reserves Level • Security of present income stream • How long would it take to close • Costs of winding up • Unforeseen (or known) major liabilities • Disclosure and Review • Brief details of policy and level • Annual report, financial statements, website • Annually • Through review every 2/3 years
Reserves and Reserves Policies
80,0% 70,0% 60,0% 50,0% 40,0% 30,0% 20,0% 10,0% 0,0%
NA's/Income
Net Assets/Total Income For most NGBs income will match expenditure over a relatively short period of time, as they strive to reinvest all income whilst maintaining reserves at a suitable level. Whilst measuring net assets to income is a very basic indicator of sufficiency of reserves, it is nevertheless a useful comparison against other NGBs and also over time if the organisation is contracting or growing significantly. All NGBs should have a more sophisticated reserves policy which takes into account "free" reserves (excluding fixed assets)and also considers the level of grant income. It is probably unreasonable to build an adequate level of reserves that takes into account significant grant income and matching expenditure.
Reserves and Reserves Policies
100,00% 90,00% 80,00% 70,00% 60,00% 50,00% 40,00% 30,00% 20,00% 10,00% 0,00%
%grant inc./other inc.
Grant Income/Total Income Increasing pressure is being put on NGB's by major funders to increase their own income, whether it is membership income, sponsorship income or commercial activities. The ratio demonstrates how reliant NGB's continue to be on UK Sport and Sport England to fund a significant proportion of their activities.
Reserves and Reserves Policies
Example Income - Grant 700 - Other 300 1000 Expenditure 1000 Fixed Assets 100 Current Assets 100 Current Liabilities (50) 150
Break Time
Governance change management, NGB experiences – Open Forum
Jenny Frommer CEO Baseball/Softball
Governance change management, NGB experiences – Open Forum
David Pond CEO GB Wheelchair Rugby
Governance change management, NGB experiences – Open Forum
Jane Nickerson COO Amateur Swimming Association
ASA
Proposed Governance Changes
The Journey
• Strategic Review: Realisation NGB life is changing No longer just about members • Recognition change was needed Deciding on that change was challenging
The Journey
• Consultation period: Interested parties?
Motivations • Timetable Slow, steady, incremental progress
Proposal
• Group Board • Sport Governing Board • Council
Current Position
• Oct 12 ASA Council approved motions • June 13 EGM to consider rule changes • June 13 Recruit and set up new structure • Oct 13 New structure fully operational
Wrap Up & Close
Chair - Mark Palios