Our General Code of Practice is expected to come into force in late March.

This presents governing bodies with an opportunity to ensure their scheme is ready to meet our expectations.

One area I want to focus on is effective systems of governance (ESOG).

The code details what we expect of governing bodies of schemes in terms of maintaining an ESOG, which brings together many key aspects of running a scheme, particularly risk management.

The code calls on governing bodies to establish and operate an ESOG, including internal controls that are proportionate to the size, nature, scale and complexity of the scheme.

There is a new requirement that governing bodies document the policies and procedures they have in place forming the ESOG, but in many cases, the ESOG is largely a rebadging of things well-run schemes are already doing.

But there are some new requirements most schemes won’t yet have in place, such as a remuneration policy.

Rather than a tick-box approach, our intention is that the code’s expectations will act as prompts to start a dialogue on whether, and how, expectations are being met, and whether processes are operating as intended, or could be improved.

But even where a governing body does opt for simple box ticking, it is likely to produce better governance outcomes than current processes.

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