At the heart of a Stewardship Trust is the Steward. Stewardship Trusts are run by Stewards, for Stewards. After all, Stewardship Trusts must meet the challenging goal of being ‘something worth caring for’. Stewardship Trusts begin by forming the Stewardship Council which acts as the voice of the Stewards.
As I’ve stated before, successful companies are purely a group of people with a shared ethos (a common ‘why’). In a Stewardship Trust, those people are Stewards. A crucial part of their shared ethos is a commitment to caring for their company (that is, each other). By definition, you cannot be part of a Stewardship Trust if you are not a Steward, as a Stewardship Trust is a collection of Stewards.
Running a company takes skill and experience. In our fast-moving economy, decisive, innovative leadership wins out. Under the Companies Act 2006, Section 40 (et al.), the power to run a company lies firmly in the hands of the board of directors (the Executive). However, that power comes with a great deal of responsibility (fiduciary duties). The Executive makes decisions, but they are accountable for those decisions. In a Stewardship Trust, the Stewardship Council holds the Executive to account but does not have any operational decision-making powers itself. Therefore, a Stewardship Council is a non-executive governing body. Although the Stewardship Council can appoint and remove directors (though the latter is heavily regulated), its real authority comes in its mandate to act as the legitimate voice of the Trust.
To maximise its effectiveness, the Stewardship Council constitutes three groups of equal weight, that work together to represent the views of the Trust as a whole.
The Executive Councillors
Accountability is most effective when mutual, that is when both parties hold each other accountable. As the Executive is held to account by the Council, the reverse should also be true. For this reason, the Executive has an equal voice in the Council. As a part of the Council, the Executive Councillors are responsible for ensuring effective communication between the various child company boards and the Council itself.
The Steward Councillors
It’s important to remember that all employees within a Trust are Stewards, including the Executive. Any Steward within the Trust is eligible to sit on the Council. However, the Executive Councillors already represent the Executive, so only non-Executive employees are selected as Steward Councillors. The Steward councillors ensure the Council hears all voices within the Trust.
Together, the Executive Councillors and Steward Councillors form two-thirds of the Council and work together to ensure the Trust runs according to its shared ethos and values. As all Stewards within the same company should share the same ethos, then not only does the Council govern by consensus; it will typically do so unanimously. However, in the rare case, that unanimous consent is unavailable; the Council can progress to a vote, on the understanding that the Executive Councillors and Steward Councillors are to stand down in the event of a division. This innovation strengthens the drive to consensus. It is viable due to two other characteristics of the Council, Independent Councillors and the Shadow Council.
The Executive and Steward Councillors are not elected but selected in a process called Sortition. Sortition is fundamentally egalitarian and arguably one of the most democratic forms of governance. Egisly forms Stewardship Councils using a weighted-random algorithm. The weight of each Steward is calculated using a formula that takes into account relative remuneration and length of service.
The Independent Councillors
The Executive and Steward Councillors should always seek unanimous consent, but divisions can arise. Also, Executive and Steward Councillors only serve for one year in office at a time. Although this has the benefit of ensuring a broader church and fresh perspectives are always available; it can hamper the goal of fostering a long-term outlook. Finally, to be effective, a Council can be enriched by external views and sound independent counsel.
All these reasons underpin the appointment of Independent Councillors. Chosen for their experience and independence, Independent Councillors do not have fixed terms in office, but instead, serve at the pleasure of the Council. That is, the Independent Councillors are added and removed by the Council. Sortition is obviously impractical for Independent Councillors who are explicitly chosen for their characteristics, however, they remain the minority on the council and they should not be encouraged to campaign for the role. Independent Councillors cannot be employed by the Stewardship Trust they serve, though they can be remunerated for their service, where appropriate.
By removing term limits, Independent Councillors provide continuity, while their fundamental independence and selection/removal process protects against the potential downsides. Further, the Chair of the Council comes from the Independent Councillors to prevent an imbalance in the voice of the Executive and non-Executive Steward members. In the case of an Egisly appointed Stewardship Council, the Chair is appointed or removed exclusively by Egisly to ensure that it can fulfil its role as the Stewardship Firewall.
The Shadow Council
Given selection by Sortition, it is inevitable not all Councillors will feel prepared or equipped to undertake the role of a Shadow Councillor. As with Jury Service, serving on the Council is a duty that cannot be avoided by anyone wishing to remain a Steward. It is important that once selected, no undue pressure can be exerted to prevent a Steward from taking their seat, and there is no greater expression of the care expected of a Steward than to serve on the Council. Further, the term limits on Executive and Steward Councillors can lead to a loss of continuity and institutional memory. For these reasons, Councillors are first selected to join the Shadow Council, where they sit until a relevant vacancy opens in the Council (usually a year later).
The Shadow Council sits with the full Council and is identical in all regards, including the right to be heard, except it does not have a vote. Of course, votes are a rare occurrence, as the Council strives to govern by unanimous consent, so this isn’t a significant difference in practice. The Shadow Council allows members to gain confidence in the role, as well as promoting continuity of governance. There is a corresponding responsibility for the Council to equip and prepare the Shadow Council for ultimate service.
Together, the Executive Councillors, the Steward Councillors and the Independent Councillors, along with the Shadow Council, have a responsibility to govern in line with the Trust agreement, for the benefit of the Stewards. In short, they have to exemplify being Stewards. They do so by consensus, and whenever possible, by unanimous consent. After all, the act of Stewardship is not one of self-interest but of care for another. In this way, the Stewardship Council is a ‘critical friend‘ of the Executive, an ‘ethos guardian’ and a strong advocate for the work of the Stewardship Trust.