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4. Decision making, risk and control

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Principle

The National Board makes sure that its decision-making processes are informed, rigorous and timely, and that effective delegation, control and risk-assessment, and management systems are set up and monitored.

 

Rationale

The National Board is ultimately responsible for the decisions and actions of the Party but it cannot and should not do everything. The board may be required by statute or the Party’s governing document to make certain decisions but, beyond this, it needs to decide which other matters it will make decisions about and which it can and will delegate.

The National Board delegate authority but not ultimate responsibility, so the National Board needs to implement suitable financial and related controls and reporting arrangements to make sure it oversees these delegated matters. The National Board must also identify and assess risks and opportunities for the Party and decide how best to deal with them, including assessing whether they are manageable or worth taking.

 

Key outcomes

1. The National Board is clear that its main focus is on strategy, performance and assurance, rather than operational matters, and reflects this in what it delegates.

2. The National Board has a sound decision-making and monitoring framework which helps the Party deliver its aims and goals. It is aware of the range of financial and non-financial risks it needs to monitor and manage.

3. The National Board promotes a culture of sound management of resources but also understands that being over-cautious and risk averse can itself be a risk and hinder innovation.

4. Where aspects of the National Board’s role are delegated to committees, Party members, volunteers, staff or contractors, the National Board keeps responsibility and oversight.

 

Recommended practice

1. Delegation and control

   1. The National Board regularly reviews which matters are reserved to the National Board and which can be delegated. It collectively exercises the powers of delegation to senior party executives, committees or individual party members, staff or volunteers.

   2. The National Board describes its ‘delegations’ framework in a document which provides sufficient detail and clear boundaries so that the delegations can be clearly understood and carried out. Systems are in place to monitor and oversee how delegations are exercised.

   3. The National Board makes sure that its committees have suitable terms of reference and membership and that:

      1. the terms of reference are reviewed regularly

      2. the committee membership is refreshed regularly and does not rely too much on particular people.

      3. The committee membership have the right expertise for the job in question

   4. Where a Party uses third party suppliers or services – for example for fundraising, data management or other purposes – the National Board assures itself that this work is carried out in the interests of the Party and in line with its values and the agreement is between the Party and the supplier. The National Board makes sure that such agreements are regularly reviewed so that they remain appropriate.

   5. The National Board regularly reviews the Party’s key policies and procedures to ensure that they continue to support, and are adequate for, the delivery of the Party’s aims. This includes policies and procedures dealing with board strategies, functions and responsibilities, finances (including reserves), service or quality standards, good employment practices, and encouraging and using volunteers, as well as key areas of activity such as fundraising and data protection.

2. Managing and monitoring the Party’s performance

   1. Working with senior Party management, the National Board ensures that operational plans and budgets are in line with the Party’s goals, agreed strategic aims and available resources.

   2. The National Board regularly monitors performance using a consistent framework and checks performance against delivery of the Party’s strategic aims, operational plans and budgets. It has structures in place to hold Party members and staff to account and support them in meeting these goals.

   3. The National Board agrees with senior Party management what information is needed to assess delivery against agreed plans, outcomes and timescales. Information should be timely, relevant, accurate and provided in an easy to understand format.

   4. The National Board regularly considers information from other parties to compare or benchmark our Party’s performance.

3. Actively managing risks

   1. The National Board retains overall responsibility for risk management and discusses and decides the level of risk it is prepared to accept for specific and combined risks.

   2. The National Board regularly reviews the Party’s specific significant risks and the cumulative effect of these risks. It makes plans to mitigate and manage these risks appropriately.

   3. The National Board puts in place and regularly reviews the Party’s process for identifying, prioritising, escalating and managing risks and, where applicable, the Party’s system of internal controls to manage these risks. The National Board reviews the effectiveness of the Party’s approach to risk at least every year.

   4. The National Board describes the Party’s approach to risk in its annual report and in line with regulatory requirements.

4. Appointing auditors and audits

   1. The National Board agrees and oversees an effective process for appointing and reviewing auditors, taking advice from an audit committee if one exists.

   2. Where the Party has an audit committee, its chair has recent and relevant financial experience and the committee includes at least two National Board members.

   3. The National Board, or audit committee, has the opportunity to meet the auditors without paid staff present at least once a year.

   4. Arrangements are in place for a body, such as the audit committee, to consider concerns raised in confidence about alleged improprieties, misconduct or wrongdoing. This includes concerns raised by ‘whistle blowing’. Arrangements are also in place for appropriate and independent investigation and follow-up action. All concerns of improprieties should be reported in confidence to the ‘1957 Committee’