Running an effective trust
Building trustee capability
All trustees need a basic understanding of key parts of trust business, but building excellence is about making the most of everyone's strengths.
Trustees don't all have to know or be good at everything — everyone brings different skills and knowledge to the table.
There are some areas that everyone needs a basic understanding of, like general financial information and things that are reported on to the trust. Ensuring everyone is across the basics while making the most of everyone's strengths is how you'll maximise the effectiveness of the trust.
Understanding the essentials
Some trustees might specialise in certain areas, but there are general things trustees need to understand and feel confident with, including:
While the complex financial work can be done by people with expertise, and a lot of the day-to-day financial issues will be done by the management team or CEO, all trustees need to be able to understand where things are at financially.
- know where the trust is at financially — the state of its assets and any liabilities
- understand, create and implement financial policies
- be able to read and understand financial reports and statements
- know when trust tax returns and payments are due, and who will be doing them.
There are training courses that can support trustees and whānau to become financially literate. Talk to our regional advisors about what might be available in your rohe.
Writing and understanding reports
Trustees may need to create and read a lot of reports, including:
- quarterly and annual reports
- performance reports
- financial reports
- owner and trustee reports.
There may be some technical reports if you have a business on your whenua. It's important that you understand what's in them. If you're unsure about anything, ask someone for clarification.
It's important that any document or reports you create for whānau are easy for them to read and understand. Get someone who has less knowledge than you to do a read-through before you share it.
Trustees should all have a good understanding of the industry that the trust is operating within (if any), for example dairy farming or apple exports. Check out our industry fact sheets as a starting point.
Upskilling for trustees
If possible, it's good to include a budget for trustee training and capability building. The more confident and knowledgeable trustees feel, the better the outcomes will be for the trust.
There are many different training providers around. Our regional advisors can help you work out where to start.
Bringing in the experts
Knowing when to call in the experts is a key part of meeting your obligations as trustees. You can use specialists to do tasks you don't have skills for yourselves, or to act as advisors to help you complete things.