How does the Oversight Trust fulfil its responsibilities?

 

Processes and Powers

The Oversight Trust has a number of rights and powers set out in the Governance Agreements which it has entered into with each Operating Company and in the founding documents of each Operating Company. (Jump to the Corporate Structure section of this page)​

 

The Governance Agreements set out the key processes and powers to enable the Oversight Trust to fulfil these responsibilities with the proviso that the Oversight Trust may make reasonable requests from each Operating Company in addition to those set out in the Governance Agreements if necessary to help the Oversight Trust meet its obligations. For examples, the Operating Company CEOs have been asked to prepare an update on specific topics for each quarterly Board meeting of the Oversight Trust.

 

The Oversight Trust’s ultimate power to enforce any concerns in relation to its responsibilities is its ability to remove Operating Company directors (or to request that an Operating Company not re-appoint them). The Oversight Trust is also involved in the process of appointing new Operating Company Chairs (in addition to its powers of ratifying their formal appointment).

 

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These rights allow the Oversight Trust to fulfil its specific responsibilities in the following principal ways:

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​(a) Ensure that the Operating Companies are well governed

The Oversight Trust reviews the activities of the Operating Company Boards and their Committees to ensure that they are acting in compliance with good governance principles (with reference to the UK Governance Code, the UK Stewardship Code and the Charity Governance Code (as appropriate)). This review is continuous throughout the year but there is a formal meeting each year with the Chair of each Operating Company and other Board members at which governance issues are discussed (Jump to Governance meetings section of this page).

 

(b) Ensure that the Operating Companies' strategic plans are in accordance with their object

The Oversight Trust reviews the Operating Companies' longer-term strategic plans, their business plans and budgets to ensure that they are consistent with their objects.

 

(c) Review achievement of social impact

The Oversight Trust reviews the Operating Companies' performance at its quarterly Board meetings and carries out an annual "deep dive" on each Operating Company to review progress against strategy and plans and reporting on the achievement of social impact.

 

Every four years the Oversight Trust also commissions an independent review of the effectiveness of each Operating Company in advancing its objects (Jump to Quadrennial Reviews).

 

(d) Review transparency of financial and impact reporting

The Oversight Trust meets annually with the Chair of each Operating Company’s Audit Committee to ensure that the preparation of Operating Company annual report is in line with appropriate governance processes. At the Governance Meeting the Oversight Trust also meets with relevant Operating Company personnel to review the reporting of social impact achievement.

 

The Board of Oversight Trust meets annually to review and to receive/adopt the Operating Companies’ annual reports in the context of approving the Group consolidated annual report and accounts.

 

(e) Ensure that any proposed changes to Operating Company objects are appropriate

The Oversight Trust reviews any changes proposed by the Operating Companies to their Objects and all such changes have to be formally approved by the Oversight Trust. The Oversight Trust cannot (except in very limited circumstances such as changes required by law or regulation) propose changes to Operating Company Articles without the agreement of the Operating Company.

 

(f) Provide guidance and advice to the Operating Companies, if appropriate and practicable, or as requested

In addition to the ongoing communication between the Oversight Trust and individual Operating Companies, the Oversight Trust has at least two Board meetings each year at which representatives from all Operating Companies are invited to discuss matters of common interest.

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Meetings of The Oversight Trust Board and Governance Meetings

The Oversight Trust normally has at least seven Board meetings each year, four Quarterly Board Meetings, two Away Days and one Extraordinary Board Meeting (see below). Each meeting carries out specific functions in order to enable the Oversight Trust to carry out its responsibilities as outlined in Section 1 above. 

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Quarterly Board Meetings

At each Quarterly Board Meeting there is a "deep dive" on one of the four Operating Companies (in rotation) and a review of the quarterly updates from the other Operating Companies in order to assess the performance of the Operating Company against its objectives. Board and management representatives from the Operating Company which is the subject of the "deep dive" will attend that meeting. Each Operating Company has a designated "Link Director" selected from the Board of the Oversight Trust - the Link Directors is responsible for liaising with their Operating Company around any issues which are contained in their quarterly updates.

Two of the Quarterly Meetings are attended (for the first part of the meeting) by Chairs and/or Chief Executives of all the Operating Companies to allow issues of common interest to all the Operating Companies to be raised and discussed.

 

Extraordinary Board Meeting

The Board reviews the reports of the annual meetings of the Governance Review Groups with each Operating Company and to enable the Oversight Trust to receive/adopt the Operating Company Annual Reports at the Extraordinary Board meeting where it reviews and authorises publication of the Consolidated Annual Report and Accounts of the Oversight Trust Group.

 

The minutes of all the Quarterly Board meetings are published on the Oversight Trust’s website (they may be redacted in case of confidential or sensitive information having been shared).

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Governance Review Meetings

There are four separate Governance strands for the annual Governance Meetings in relation to all four Operating Companies. The conclusions of the Governance Review Group are fed-back to the Oversight Trust Board as follows:

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Chair-to-Chair - to review any significant governance issues arising and broader issues of concern to the Operating Company Chairs.

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Remuneration Review - to review remuneration policies and annual Remuneration Report with the Chair of the Operating Company Remuneration Committee.

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Accounting Review - to review governance processes and contents of the Operating Company annual report with the Chair of the Operating Company Audit Committee. This also feeds-in to the preparation of the Annual Report of the Oversight Trust.

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Impact Review - to review social impact objectives and the achievement and public reporting of social impact with the Operating Company

 

Equality, Diversity and Inclusion (EDI) policies are also reviewed at this meeting.

 

Governance Review Groups are led by the Chair include the Senior Independent Director and other Oversight Trust representatives as detailed here (jump to Board Roles). Link Directors for each Operating Company will also be in attendance in order to bring their more informed knowledge to bear on any issues arising.

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Link Directors

Each Operating Company has a designated Link Director selected from the members of the Oversight Trust Board. The objective of Link Directors is for someone on the Board of the Oversight Trust to be close to the activities of each Operating Company and to liaise with that Operating Company on any issues arising from quarterly updates where the Operating Company has no representation at the relevant Quarterly Meeting of the Oversight Trust Board.

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The Link Director is not intended to represent the interests of the relevant Operating Company - rather to have a more informed knowledge of any issues relating to it. Link Directors change periodically to ensure a good spread of knowledge of individual Operating Companies across the members of the Oversight Trust Board.

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The current allocation of Link Directors from the Oversight Trust Board is detailed here.

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Statements of Assurance

There is a separate requirement for the Operating Companies to provide a “Statement of Assurance” from their Chairs. This assurance is in a standard form and confirms that the Operating Company is in compliance with the Governance Agreement and that dormant accounts funding has been spent in accordance with the purpose detailed in the Operating Company’s tripartite Funding Agreement with the National Lottery Community Fund and Oversight Trust. (In the case of Better Society Capital, the tripartite agreement relates to its receipt of dormant account funding in the form of an equity investment by the Oversight Trust.)

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The Oversight Trust Governance Review
In 2021 the Oversight Trust commissioned an assessment of its Governance practices with a view to adopting policies, role descriptions and terms of reference to clarify the functions of the Oversight Trust and establishes its accountability to stakeholders. In 2024 a review of the Oversight Trust’s Governance Processes was conducted by an independent consultant who interviewed stakeholders (including Operating Companies) for their input. It is anticipated that a further external reviews of the Oversight Trust’s Governance and Board Effectiveness will be carried out at least every five years.

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Quadrennial Reviews

 

​Purpose

The Oversight Trust commissions an independent Review, on at a quadrennial basis, of each operating company to examine their effectiveness in delivering against their respective missions as set out in their governing documents.

 

The Reviews are intended to offer constructive challenge and comment on strategic issues for consideration, to which the Operating Companies are expected to offer a public response. They are also expected to identify and highlight successes and achievements. The Reviews are not intended to dictate the future direction of the reviewed Operating Company and are not audits. They will not be carried out by a team of subject matter experts from the field in which the Operating Company operates, and as such will not be expected to offer specific recommendations about improvements to the operating model, rather highlight issues raised by stakeholders.

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Method

Each Review is commissioned by the Oversight Trust, led by an independent panel, and is published publicly. These Reviews provide a sense of accountability to the wider public, which is appropriate considering the source of the funding of the Operating Companies. They provide an opportunity for a wide range of stakeholders to feed in their views and for the Chairs of the Operating Companies to respond publicly. The Quadrennial Review Report raises issues for the Operating Company to consider rather than making recommends.

 

Some information is gathered from the operating companies themselves (impact and monitoring reports, board papers etc.), and this will be augmented by a public call for evidence and interviews with key stakeholders (including beneficiary organisations), led by the commissioned reviewers.

 

 

Terms of Reference

The initial terms of reference for the Review are attached to the Operating Companies’ Governance Agreements, but these may be developed by the Oversight Trust Review Team over time in light of experience.

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Form of Report

The Report is a brief, high-level report (roughly 20 pages in length) intended to be focused rather than comprehensive. It identifies both key achievements of the Operating Company and strategic issues where the Review Panel believes further consideration is required. The Chair of the Operating Company being reviewed is expected to publish a public response and the Oversight Trust Board also publishes its own response (see below).

 

Appointment of Review Panel

The Oversight Trust Quadrennial Review Team appoints a suitably qualified Panel to conduct the Review. The Panel comprises three independent members (supported by a Secretariat), all with appropriate experience of the issues covered in the Terms of Reference in the context of the Operating Company’s activities. The recruitment process for the Review Panel involves the Quadrennial Review Team and Nominations and remuneration Committee reviewing names, suggested by the Oversight Trust Board and the Department for Culture, Media and Sport, of individuals who have the background and track-record to be able to produce a high-quality report. To ensure objectivity, the individuals will not be directly from the sector covered by the review. The Quadrennial Review Team will look to appoint a Panel that reflects diversity of perspective and experience.
 

Interface with Operating Company

The Operating Company that is being reviewed is expected to co-operate fully with the Review process and provide all information that is reasonably requested. A draft copy of the Review is shared with the Operating Company to ensure the factual accuracy of the report. In addition to the published response by the Operating Company’s Chair, the Oversight Trust may publish its own observations on the process, the Report’s conclusions and the Operating Company’s response. The Oversight Trust may use the findings of the Review as the basis for the subsequent annual Deep Dive review of the Operating Company in question to gauge progress against actions that have been identified.

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Evolution of The Oversight Trust

Background

The Big Society Trust (which changed its name to the Oversight Trust in August 2020) was originally established in 2011 for the purpose of overseeing Big Society Capital and ensuring that it remained “on mission”.

Alternative oversight through regulation by the Charities Commission or the Community Interest Company Regulator or by the Government holding a Golden Share were considered. However, the idea of establishing a two-tiered governance structure with an independent private sector company limited by guarantee with a Board comprising stakeholder representatives acting as the majority shareholder was also proposed. This was the option preferred by the Cabinet Office (the Ministry responsible for the Office of Civil Society at that time) and the nascent Big Society Capital.

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Evolution of BST Since Establishment in 2011

Initially the Big Society Trust met twice a year. It shadowed the Big Society Capital Board and received updates at these meetings in the form of papers already prepared for the Big Society Capital Board and an oral update from the Big Society Capital CEO.

In 2014, the Big Society Trust became the sole member of the newly created company Access – The Foundation for Social Investment (Access) in order to perform a similar oversight role.

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A review of the Big Society Trust’s Governance in 2016 highlighted the need for greater clarity on the role and responsibilities of the Big Society Trust in relation to its two operating subsidiaries. This resulted in a codification of these functions for both organisations.

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In 2018, the Big Society Trust received a grant from the National Lottery Community Fund (under the direction of the DCMS Secretary of State) of £10 million for place-based investment which it passed on to Access under a Grant Agreement with the Big Society Trust. Access was required to produce a letter each year to confirm it was complying with its obligations under this agreement (Letter of Assurance).

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The Big Society Trust took on the oversight role for Fair4All Finance and the Youth Futures Foundation in December 2019. This involved developing the oversight model to cover all four operating companies and was an opportunity to reflect the new governance structure for all four companies on a consistent basis in each company’s Governance Agreement with the Big Society Trust and in the newly created companies’ Funding Agreements with the National Lottery Community Fund  and the Big Society Trust. (Access has since also entered into a Funding Agreement with the National Lottery Community Fund and the Big Society Trust.)

In December 2019, the Big Society Trust, which had previously been supported administratively by Big Society Capital, entered into a Funding Agreement with the National Lottery Community Fund to become independent of Big Society Capital’s systems and appointed a Chief Operating Officer/Chief Executive Officer.

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In August 2020, the Big Society Trust changed its name to “The Oversight Trust – Assets for the Common Good” to reflect its broader remit. Big Society Capital subsequently changed its name in 2024 to Better Society Capital.

The Oversight Trust Board was expanded to comprise 11 Non-Executive Directors with relevant backgrounds and expertise in 2023.​

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Corporate Structure

 

Ownership Structures

Fair4All Finance, the Youth Futures Foundation and Access are all companies limited by guarantee which have the Oversight Trust as their sole member. (Access is also a regulated charity.) Better Society Capital is a company limited by shares. You can find the Corporate Structure chart here.

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The shareholding of Better Society Capital comprises “A” shares held by the Oversight Trust and “B” shares held by the shareholder banks (NatWest, HSBC, Barclays and Lloyds Bank). The “A” shares enjoy 80% of the voting rights at shareholders’ meetings and specific protections for the interests of the minority shareholders are contained in a Subscription Agreement (see below).

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​​Governance Documents

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1. The Oversight Trust and Operating Companies each have Articles of Association – these are all public documents available at Companies House.

2. Each Operating Company has a Governance Agreement with the Oversight Trust (dated 2019) – as described below.

3. Fair4All Finance, the Youth Futures Foundation and Access each have a tripartite Funding Agreements with the Oversight Trust and the National Lottery Community Fund – these documents specify the conditions attached to the Dormant Asset funding provided by the National Lottery Community Fund (including the specified purpose of the funding, reporting and other legal requirements).

4. The Oversight Trust also has a Funding Agreement with the National Lottery Community Fund which provides for funding for its operations on an on-going basis from the English allocation of Dormant Asset monies.

5. Better Society Capital has Subscription Agreements with the Oversight Trust. The original Subscription Agreement with the Oversight Trust and the shareholder banks (dated 2012) details the rights of the shareholder banks in relation to the governance of Better Society Capital and any further subscription of shares.

6. Access has a Grant Agreement with the Oversight Trust detailing the use of the £10 million grant it received for place-based funding in 2018.

 

Governance Agreements

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The board of each Operating Company is responsible for its own governance, strategy, policies and procedures, day-to-day operations and ensuring that its funds and resources are at all times applied in a manner that is compatible with:

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(a) its objects;

(b) the requirements under the Dormant Accounts Act;

(c) any requirements in respect of State Aid;

(d) principles of good governance; and

(e) the terms of its Governance Agreement.

 

The Oversight Trust is responsible for oversight of each Operating Company, with the aim of ensuring that they remain true to their objects. The Governance Agreement sets out the Oversight Trust’s key processes and powers to enable it to successfully achieve these responsibilities. (See The Role of The Oversight Trust section of this page). 

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Board Roles

The Board of the Oversight Trust comprises:​

Sir Stuart Etherington (Chair; Nominations and Remuneration Committee; and Remuneration, Governance Review Group)

Kevin Davis (Link for Access; Quadrennial Review Team Member);

Helen England (Link for the Youth Futures Foundation);

Jo Fox (Government Appointee, Nominations and Remuneration Committee);

Phil Chamberlain (National Lottery Community Fund Appointee);

Nicola Pollock (Senior Independent Director; Quadrennial Review Lead; and Governance Review Group);

Andrew Rose (Link for Better Society Capital);

Meera Craston (Impact Governance Review Group);

David Lindsell (Link for Fair4All Finance and Accounting Governance Review Group);

Vicki Thornton  (Quadrennial Review Team Member); and

Robert Bell (Nominations and Remuneration Committee Chair).

 

Board Committees

Besides the Quadrennial Review Team and the Governance Review Team, the Oversight Trust Board has established a            Nominations and Remuneration Committee. The Committee is responsible for making decisions about recruitment and    remuneration policy for: the Oversight Trust Board, the independent Review Panel and staff.

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 Staff

Chief Executive Officer and Company Secretary
The Oversight Trust currently has one employee who acts as Chief Executive Officer and Company Secretary.
Their role is to be responsible for maintaining ongoing relationships with the Operating Companies, making arrangements around the Oversight Trust’s oversight activities and all other administration of the Company including ensuring compliance with reporting requirements, producing the consolidated group annual report and organising and recording the minutes of Board meetings.
 

 

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