07 December 2017 by Simon Osborne
The Institute has been central to 2017’s governance developments
The past year has seen governance constantly in the crosshairs, as the UK government’s plans for corporate governance reform; various failings in the area of sport governance; and a revised code of governance for the charity sector have kept the subject front and centre of practitioners’ minds.
In this context, it has been a particularly busy year for ICSA: The Governance Institute.
We have participated keenly in the corporate governance debate, responding to the government’s green paper and the Business, Energy and Industrial Strategy (BEIS) Select Committee’s consultation, and corresponding with the prime minister, Theresa May, about executive pay and the importance of corporate governance in creating an economy that delivers opportunity and choice for all.
In January, we announced our plans to launch a joint project with the Investment Association to address concerns that the voices of key stakeholder groups such as employees, customers and suppliers were not being heard at the highest levels of British business.
‘The Stakeholder Voice in Board Decision Making’ guidance launched in September and was welcomed by the government as a way of ensuring that the broadest range of views and perspectives are heard in the boardroom.
Another area on which we were keen to press the government was the need to mandate larger private companies to apply the principles of independence and transparency that have worked for public companies.
I am pleased to say that we have been invited by the Financial Reporting Council (FRC) to form part of the working party looking at a voluntary code of governance for private companies.
In February, ICSA policy advisor Chris Hodge produced the first in a series of thought leadership papers looking at the future of governance in the UK.
“We need to untangle the different components of corporate governance if each is to be addressed effectively”
His paper ‘Untangling corporate governance’ argues that the expectation for corporate governance has gone from ‘better oversight’ to ‘saving capitalism’; and that we need to untangle the different components of corporate governance if each is to be addressed effectively.
The next paper in the series will discuss the future of sport governance, and I look forward to reading the findings when they are published in early 2018.
The sporting world has been rocked by some serious governance failings in recent years, with heightened scrutiny around issues like culture and welfare. However, there has been considerable change in the sector this year, following the publication by UK Sport and Sport England of their Code for Sports Governance.
We have produced guidance on sports governing body effectiveness, which clarifies what good governance looks like and aims to enhance governance practices within the sector, regardless of size and level of visibility.
We have also held an inaugural sport governance conference in November at which we assessed how sports organisations are getting to grips with the challenges of good governance, the implications of the new code and key issues such as safeguarding and diversity.
Many of the speakers stressed the importance of changing organisational culture and it is clear that those organisations that are taking a proactive rather than reactive approach to the challenges they face will be in a better position to help secure the long-term health of the sector.
In the voluntary sector, charity governance was in the news again, with fundraising practices, administration costs and the ongoing fall-out of the Kids Company collapse continuing to generate media headlines.
There were some positive developments, however, including the Law Commission’s report on ‘Technical issues in charity law’ and a draft bill, which provided some excellent proposals to ease life for trustees.
Furthermore, the House of Lords’ Select Committee on Charities’ report on the sector contained some sensible proposals and Civil Society Futures began work on a report due out in 2018 that will highlight a number of governance opportunities.
Louise Thomson, our head of policy (not-for-profit), was part of the steering group that worked on a revised code of governance for the charity sector. Laying the emphasis on people and principles rather than processes, the code has been welcomed as the benchmark for governance in the sector.
“The code has been welcomed as the benchmark for governance among charities”
We have also produced a report on ‘Cultural markers in charities’ that identifies behaviours and practices that could be indicative of flawed organisational culture, and published numerous pieces of guidance to support good governance in the sector, including advice on trustee recruitment and guidance on how to build a board assurance framework.
Our policy and research team has produced guidance and published research on a range of topics – from GDPR, terms of reference for audit committees and minute taking, to the role of tension and conflict in the boardroom – as we seek to strengthen our voice in what is becoming an increasingly crowded governance space.
You can find out more about ICSA’s policy work in our 2016–17 annual report, which will be available online in early January.
This year has been significant in many other ways. In January, we launched a new Level 5 International Finance and Administration suite of qualifications, a successor to the old Diploma in Offshore Finance and Administration, and which includes, for the first time, a module on fund administration.
Work also began on three new standalone governance qualifications due to launch in 2018: certificates in corporate governance and sports governance will launch in January and a certificate in academy governance will launch in June.
In October, members voted in favour of proposals by the international Institute to introduce a new class of membership (affiliated member) and a new designation (chartered governance professional).
Bearing in mind that professional bodies rarely secure a large voting turnout from their members, even for major proposals, I was pleased that just under 14.97% of UKRIAT members participated.
It was gratifying that the 24 town hall meetings to explain the proposals, which were held in the UK, Crown Dependencies and Ireland, were attended by over 5% of our members in UKRIAT.
As previously communicated, the UKRIAT Committee is now considering how best to realise the opportunities that these charter changes offer.
We are keen to offer affiliate membership to the alumni of our standalone qualifications and to others interested in our work, and will explore ways of expanding the successful affiliate scheme that we already operate.
2018 promises to be no less busy with work on the upgrading of CSQS to produce an integrated qualifying scheme leading to both chartered designations – chartered secretary and chartered governance professional – as well as the creation of a competency framework for governance practitioners.
We will also be seeking the views of employers across key sectors about how we can provide solutions to current and future governance needs, as well as establishing a new student forum to give students a stronger voice within the UKRIAT division.
Thanks to all our members, graduates and students for your support throughout the year and best wishes for 2018.