Master of Her Universe: An Interview with Tamara Franks, Head of Operations, Group General Counsel at Universities Superannuation Scheme
It is perhaps not surprising that the UK’s largest pension scheme by assets, the Universities Superannuation Scheme, has a large multifaceted in-house legal and compliance function.
The scheme has over £67 billion under management and over 450,000 members, made up of active and retired academic and academic-related staff,
“It’s a delicate balance between developing more efficient systems, without taking responsibility for contracts away from the business units. It is really important that the business does not lose sight of its contracts. We are a second-line function and therefore need business units to consider risk locally and to bring matters to us when legal advice is required.”
Tamara Franks, Head of Group General Counsel Operations, oversees the central GGC Operations team that works alongside the individual legal, compliance and governance teams to help them streamline and improve the process aspects of their work.
The legal team comprises 16 people and the review and negotiation of contracts account for a significant volume of work for the team. These can range from contracts with service providers to the pensions and investment businesses as well as contracts relating to the Scheme’s significant property portfolio or complex investment transactions.
“The Scheme holds stakes in some really quite complex investments such as Heathrow and Moto, the motorway services business, and there is obviously a lot of documentation that goes with that,” says Tamara.
Executed documents are saved into a SharePoint-based legal document management system for easy access for the legal team. The legal function is not responsible for the retention of the organisation’s agreements but instead, each business team is responsible for its own contract storage.
The team, alongside the procurement team, has developed its own contract lifecycle management (CLM) process called the Supplier Toolkit that sets out a consistent process that new contracts have to undergo, with approvals from different teams, such as procurement, compliance, information security and legal. Each team performs its own review and checks on the contract, with the legal team responsible for the legal review and approval. There is also an inflow tool, or legal portal, for contracts that do not require an invoice to be paid, and a central contract repository where the documents are stored after completing the Toolkit process.
Tamara says that whilst they are continually looking at ways to enhance the process, the system works well and acts as a significant control. One recent development is the creation of a process for ensuring the level of risk and importance of business-critical contracts is recognised more effectively in their processes.
“It’s a delicate balance between developing more efficient systems, without taking responsibility for contracts away from the business units. It is really important that the business does not lose sight of its contracts. We are a second-line function and therefore need business units to consider risk locally and to bring matters to us when legal advice is required,” she explains.
Interrogation phase is key
The phase where more digital technology might be beneficial, she says, is the “interrogation phase” where the team looks to extract the key information from a contract and ensure there is a clear understanding and awareness of the obligations and responsibilities for both parties.
In terms of having sufficient visibility of the obligations and risks in a contract, Tamara is confident that the current systems work effectively. Colleagues in the commercial part of the legal team have worked hard to significantly increase the understanding of which contracts exist in the organisation, but she recognises there is always room for improvement. In particular, she says the interrogation phase would benefit from a digital tool.
“Generally speaking, I think we’re in a good place in terms of understanding what contracts are out there. We have data analytics on where in the organisation contracts are being put in place, the value of those contracts and certain key terms being agreed. In parallel we have a sound understanding of where legal risk arises within the organisation,” she says.
Given the nature of the organisation and as a trustee of an occupational pension scheme, the duty to act in the best interests of the members of the scheme is taken very seriously, so anything that relates to the members is very carefully considered.
“We are accountable to multiple regulators and legal and regulatory breaches are contrary to our risk appetites,” says Tamara.
Three key takeaways
- Be aware of your universe of contracts and understand what is out there in your organisation.
- Create a record of business-critical contracts so you understand where the material risks lie and identify an executive owner for each of these agreements.
- Allocate your resources according to the different levels of legal risk identified within your contract universe