During 2016-2017, following changes in appointments to its board of directors, Tyne Valley Community Rail Partnership (TVCRP) decided to undertake a structural review of its internal governance. The partnership felt that it was to become more effective and self-supporting, it had to strengthen both its business culture and processes.
The CRP took a detailed, step-by-step approach to evaluate and address a range of governance issues.
Reviewing strategies and procedures
To establish where there might be shortcomings, the CRP undertook the following tasks:
- It reviewed its memorandum and articles of association to ensure they reflected its aims, objectives, and long-term strategy, and updated them to complement the four pillars of the Community Rail Development Strategy;
- It examined its accounting processes, with the aim of giving the board a clearer vision on its financial position by reporting not only on bank balance, debtors, and creditors, but on all cash flow, free funds, and liabilities, including projects where cash had not been fully outlaid. It was agreed that a monthly board report would be prepared covering all key aspects. The need for a new online accounting system was also identified, and this was subsequently installed alongside training for those who might need to use it;
- It developed clearly assigned roles for board members and directors, which had previously been limited to chair and treasurer. It then agreed an annual budgeting process to which responsible directors identified their portfolio needs. It also recognised that quarterly progress measurement reports against budgets needed to be introduced.
All changes were agreed by the board and a resolution on changes to the memorandum and articles of association were put to the next AGM and approved by shareholders.
TVCRP’s management processes were reviewed to embrace and ensure:
- Good meetings process and protocol, including agendas issued seven days in advance with board submissions on all key proposals requiring written papers, decisions, and activity updates from principal office holders. The partnership successfully moved to virtual monthly meetings via Zoom during the pandemic for both its monthly board meetings and AGM. From 2023 onwards, it is now proposing a split between physical and virtual meetings with physical meetings also being relayed via Zoom to cater for board members with varying commitments;
- Effective financial management existed, including: annual returns being submitted to Companies House; HMRC receiving audited accounts, and tax returns focused on trading income rather than net overall surplus to control corporation tax liabilities; payroll management being expertly handled and PAYE properly accounted and paid quarterly; employee’s legal pension requirements being met;
- Adequate insurance cover, including assets, legal liabilities to employees and public, liabilities under leases, and director and officer’s liability cover.
Board composition, management, and succession planning
To ensure a rigorous approach in this area, the partnership explored the following issues:
- Did the board contain people with the right skills to direct the organisation in achieving its stated aims and objectives? Was there the right level of commitment on the part of board members?
- Were board members empowered and tasked by the chair with specific agreed roles? This led to portfolios for board members being agreed and job descriptions introduced, providing a guide on performance to be annually checked by the chair;
- Were directors educated in their legal duties and fully acquainted with the organisation’s policies, procedures, and issues? This led to the CRP ensuring appropriate induction sessions prior to appointments;
- Were there sufficient monitoring and evaluation processes in place? This led to the establishment of a continuous monitoring and reporting system for action plan activities with quarterly reporting to the board, and a specific annual board governance event at which the organisation evaluates itself and considers ideas for future action plans;
- Did the CRP know when to seek external advice or guidance rather than solely rely on in-house skills? For example, seeking legal advice in terms of property leases or accounting advice in terms of VAT;
- Was the CRP’s approach to project management as effective as it could be? This led to the formation of steering groups and working/task and finish groups on certain projects, with appropriate terms of reference established;
- Was adequate contingency and succession planning in place? This led to the partnership asking each key portfolio holder to develop an annual calendar of their TVCRP tasks (on a month-by-month basis) in addition to their job descriptions to ensure that should that portfolio holder be unable to complete those tasks, for example by virtue of illness, the chair could reallocate as necessary. To aid succession, the CRP has worked with a senior board member to split his role, cascading part of his duties to a new board member.
Policies & protocols
Following its governance review, the partnership now has policies in place for:
- Health and safety – with risk assessments
- Child protection
- Data privacy
- Social media/media relations
- Employment with related aspects (e.g. grievance, recruitment)
Protocols have been developed on:
- Project controls
- Expense management including bank authorities and board expense management
- Use of TVCRP facilities by other organisations
- Volunteer involvement in activities (station ambassadors, adopters)
- Contract letting
The policies and protocols are now reviewed annually to ensure they remain contemporary and legally secure. Director, staff, and volunteer handbooks have been created to bring together key information and are made available digitally/hardcopy to all relevant parties. A risk register has also been established which records exposure to significant risks against high, medium, low criteria via a points system, with high risks receiving prime attention in control planning.
TVCRP has progressively grown its project-related activities and has reviewed its processes to ensure effective management applies. All projects are now subjected to the following process:
- Project proposals brought to board for agreement in a written submission which covers intention, cost, funding, timetable (date line/stages) and final sign off;
- Project teams formed with a project leader;
- Project entered into a project management progression summary (PMPS);
- PMPS sheet records progress with a coloured scheme (red, amber, green) measuring stage development. Update sheets are issued at each board meeting for review;
- On completion projects are summarised both for funders and the board to identify successes, failures, and lessons learned.
TVCRP considers itself a stronger organisation for the detailed governance exercise it has undertaken. The partnership is currently evaluating whether to convert from being a limited company to a charitable incorporated organisation or a charity, with a decision expected in 2023.