4 September 2007

Pitfalls identified in decision making process

Recent reports have highlighted the need for trustees to be provided with more effective tools when engaging in their decision making.

The Centrica Pension scheme trustee board was recently found guilty of maladministration when it failed to recognise and address conflicting evidence which concerned the distribution of a death benefit.  It was argued that conflicting accounts in the family’s questionnaires should have been investigated further before a decision was reached.

Although an important issue with serious repercussions, this event could have been easily avoided by providing the trustees with effective tools from the outset to aid them in their decision making.

An associate at ‘Sacker & Partners’ commented on the case stating, “the case demonstrates the importance of appreciating and understanding whether there is any inconsistency in the information provided by potential beneficiaries, as opposed to trustees relying on a summary prepared for them.”

At eShare, they have designed a module within their Governance Software package which specifically addresses the issue of decision making.  The module entitled ‘eDecisions’, helps trustees when reaching important decisions by allowing them access to all research regarding a case and to relevant precedent data and similar cases.  This improves decision making as people have a well organised database of information on which to make the decision.  It also ensures no decision is reached until all relevant parties have provided their recommendations in relation to the research.  Nothing can ever be overlooked and transparency to this process is improved.  If a dispute ever occurs, as in the Centrica case, it can clearly and easily be seen how and why a decision has been reached.

“eDecisions has allowed our clients to improve their decision making whilst adhering to the Ombudsman’s wishes to improve transparency to the process,” said Alister Esam, Managing Director of eShare.  “Good decision making is part of good governance and through implementing eDecisions schemes can be sure of improving their governance processes.”

Through the eDecisions module of eShare, schemes can expect to experience several benefits including greater consistency, increased transparency, better informed decisions and quicker decision making.  Trustees are better protected as each decision has a full audit trail demonstrating the process which has occurred to make a decision.

“eDecisions can help ensure the pitfalls in decision making are eliminated,” said Esam.  “Knowledge and understanding are key to ensuring that informed decisions are made and issues such as those at Centrica do not arise.”

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