What ‘good governance’ actually looks like in 2026 - better decisions, less process

Ask ten trustees what good governance looks like and you will probably hear the same answers: comprehensive papers, detailed minutes, well-defined policies and regulatory compliance. All of those matter, of course, but they do not necessarily mean a scheme is well governed.

In 2026, the biggest governance risk facing many pension schemes is not a lack of process. It is having so much process that decision-making becomes slower, less focused and ultimately less effective. That may sound counterintuitive at a time when regulatory expectations continue to evolve.  Yet as schemes mature and endgame planning becomes an increasingly important priority, trustee boards need governance that enables good decisions, not simply demonstrates compliance. There is an important difference.

Governance should accelerate decisions, not slow them down

Over time, governance has naturally become more sophisticated.

Additional committees have been established. Board papers have become longer. Risk registers have expanded. Advisers produce increasingly detailed analysis. Every significant decision is supported by extensive documentation. Each of these developments has been introduced with the best intentions. Collectively, however, they can create a governance model where process begins to overshadow purpose.

We have all experienced meetings where trustees spend significant time reviewing papers but comparatively little discussing the key strategic decisions in front of them. Good governance should create clarity.

Every agenda item should answer three straightforward questions:

• What decision are trustees being asked to make?
• What information is genuinely needed to make that decision?
• What happens next?

If those answers are not obvious, governance risks becoming an administrative exercise rather than a strategic one.

More information does not always lead to better governance

Trustees have never had access to more information. Funding updates, investment performance, covenant monitoring, administration metrics, cyber resilience, ESG developments, regulatory change, dashboards and operational risks all compete for attention.

The challenge is no longer gathering information. It is identifying what genuinely matters.

Good governance is not about producing the longest board papers. It is about giving trustees the insight they need to reach confident decisions.

That often requires advisers to exercise greater judgement themselves. Instead of presenting every available piece of information equally, advisers should help boards understand what has changed, why it matters and what action is recommended.

Trustees do not need more data. They need better insight.

High-performing boards spend less time reporting and more time thinking

Many trustee meetings remain heavily weighted towards reviewing what has already happened.

Operational updates are essential, but governance should also create space for strategic discussion.

Questions such as:

• Is our governance model still appropriate for where the scheme is heading?
• Are delegated authorities working effectively?
• Do we have the right skills around the board table?
• How will today’s decisions support our long-term funding and endgame objectives?

These conversations often have a greater impact on member outcomes than another detailed review of historical activity.

The strongest trustee boards deliberately protect time for strategic thinking rather than allowing operational reporting to dominate every meeting.

Governance is as much about culture as structure

Terms of reference, committee structures and governance frameworks all play an important role. But they are only part of the picture.

The most effective boards share characteristics that are much harder to document. Members feel confident challenging assumptions.

Different perspectives are encouraged rather than managed away. Advisers are expected to explain issues clearly rather than hide behind technical language. Decisions are debated constructively before consensus is reached.

Good governance is not simply about having the right framework. It is about creating an environment where trustees consistently make better decisions together.

Governance should evolve with the scheme

Perhaps the greatest misconception is that governance is something a board eventually perfects. In reality, it should continually evolve.

The governance arrangements that served a scheme well five years ago may no longer reflect its funding position, investment strategy or long-term objectives.

As schemes move closer to buy-out, run-on or other endgame solutions, governance should become increasingly proportionate to those changing priorities.

That may mean simplifying reporting, refining committee structures, delegating more effectively or reassessing the skills needed around the board table. Good governance should never stand still.

The real measure of success

Regulatory compliance will always remain fundamental, but compliance should be the starting point, not the destination.

Ultimately, trustee boards should not judge governance by the volume of papers produced, the number of meetings held or the length of the governance manual.

They should judge it by something much simpler: does our governance help us make better decisions for members?

If the answer is yes, governance is delivering real value. If the answer is no, adding more process is unlikely to be the solution.

In 2026, good governance is not about doing more governance. It’s about making governance work harder.

Phil Farrell is a Partner at Quantum Advisory; click here to find out more