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My response to the Presidential Commission Interim Report

Quentin Leiper's picture

Institution of Civil Engineers Governance

Comments on Presidential Commission Interim Report

Quentin Leiper, President, 2006-7 September 2019

 

1 Executive Summary

This submission provides my comments on the Interim Report of the President's Commission.

I hope that all the Commission members will take the time to read this submission alongside the various clauses I have commented on in the report.

The report starts with a “blank sheet of paper”, quickly recommends a 12 person trustee board and then spends 35 pages justifying this and then attempting to create a management structure to fit........creating an unnecessary Nomco, opting for selection rather than election, establishing roles for all the trustees and seeking some sort of Trustee Board/Council arrangement, without “overburdening” the Trustee Board or the Trustees.

The report implies criticism of all previous trustees as insufficiently skilled and even proposed importing Trustees to the board. This assumes that Institution members cannot be found to manage our own institution.

The major failing of the commission is that it has completely ignored a governance system which has worked for many decades.... a larger trustee board (as Council) with an executive.

This system of governance has proved successful. Past Trustees have not lacked any “skills” and have understood their responsibilities as trustees.... they have even managed to understand the accounts, been able to read the Council papers and proved themselves to be an agile governance body. 4 pathetic reasons put forward to justify the reduction in Trustee numbers.... combined with the implied inconvenience and perhaps difficulty of managing a larger Trustee board.

The Commission has also failed to consider any organisations with larger boards, for example universities (Cambridge, Heriot Watt and Cardiff have all been quoted The University of Southampton has not even been mentioned...it has 19 Trustees, of which Philip Greenish is the Chair. I wonder if the University of Southampton is planning to reduce Trustee numbers to 12. If not, then why not? Perhaps because a larger Trustee Board works!).

Note too that the Engineering Council is a charity (22 Board members, but 23 photos on their website! It is the UK regulatory body for the engineering profession). I hear no mention of the Engineering Council board being “oversized”..... or even of consideration of this body in the report.

By the way, if Trustees do not understand their responsibilities or understand the accounts.... it is the fault of the Institution for not briefing potential candidates and for not providing appropriate training to trustees. As a younger Council Member in the late 1980s, I, and other Trustees were fully aware of our responsibilities and could even read the Board papers and understand the accounts.

Several governance reviews up to 2014 have all recommended a larger and representative board.... are these reviews (also not considered by the commission) now all invalid?

I see that the report refers to the “Learning Society” on several occasions. The term for our type of institution is “Learned Society”. In fact, we have a Learned Society Committee chaired by a VP. Is “Learning Society” (which could be a school, college or university” a new definition.... or just a drafting error?

It would take too long to pick through the biased leanings of the report in detail, but I will comment on some of them:

Section 5 ICE's Top-Level Governance Structure

Bullet 3: were there compelling reasons to change to a smaller board...... No...NO...NO!

5.1.3: line 5.... “Exec Board took decisions”... really? The Trustees take decisions.... the Exec Board can only recommend unless specific authority has been given.

No challenge?.... really?....

5.1.4: Why not expect trustees to be responsible? This is motherhood and apple pie stuff!

5.1.5: agreed!

5.1.7: “governance arrangements that will endure for the long term”..... does the report mean like the long term governance arrangements which have served our Institution well for decades and been reviewed several times over that period?

5.2.4: Larger Board

Pros... the report fails to identify “broader representation of the membership”

Cons: NO, NO, NO, NO ….these are rubbish. For example, scheduling meetings.... which are fixed a year in advance! Opportunities for debate..... there have always been opportunities for debate.... has this changed recently? Cohesion, engagement?.... What has happened to Council? the senior team need to try harder! What happened to the opportunities Council Members had by being appointed to committees? A quick review of “Committees and Panels” certainly indicates that Council members are nowhere near as involved in committees and boards as used to be the case.

5.2.5: Smaller Board

Pros: Ah! We have found more bullets here! What a surprise!

Bullets 1, 2, 4, 5, 6: NO.... there is no difference for a larger board.... or have things changed?

Bullet 3: same as for a larger board in my view.

5.2.6: 7 directors might be OK for a business, but we are a Learned Society... the Commission should remember this!

5.2.7: “faster and better decision making” RUBBISH! and not demonstrated or even discussed in the report.

“everyone a fair say” this is the same for a larger board... or have things changed recently?

“greater burden on the chair” this implies that recent Presidents cannot manage a larger board, I find it difficult to believe that. The President should ensure that everyone who wishes to contribute should do so. I do understand that this might be inconvenient to Presidents who might be used to small business boards.

5.2.8: “independent specialist in charity governance”..... I can only assume this is supposed to read “independent specialist in “small trustee board” charity governance. No trustee board size experience quoted (just 6 noted.... but what sizes are their boards?), let alone any experience of large trustee boards has been provided. I consider that undue weight has been placed on this one persons evidence, while evidence from Institution members with decades of experience of, and contribution to, the Institution has been ignored.

5.2.8: Dr Andrew Purkis' evidence seems to have carried more weight that the many submissions from Institution members who are recommending a larger board. I think that the commission should consider the weight of evidence from those who have led the Institution in the past. “set speeches”, “difficult for all trustees to contribute meaningfully”.... surely the Commission did not swallow all this!.... not the experience I have after 8 years on Council (as a trustee). It is obviously more convenient for the Commission to take the views of an outsider than the views of those who have been involved in the Institution and its various committees for decades.

5.2.9: No! “difficult to uphold” referring to Trustee responsibility......another load of codswallop..... The Institution should advise potential trustees of the responsibilities before they stand for the Trustee Board and then provide appropriate training to successful candidates. Is this report suggesting that this no longer happens, hence the weight given to Dr. Purkis' evidence? I suggest that there is no evidence provided to substantiate this statement!

If, in the Institution, there has been this problem, then it is the fault of the Institution.

The other thing to remember is that the Institution is a professional body and its members are expected to follow its Code of Professional Conduct.

Remember Rule 2: “Members shall only undertake work that they are competent to do”.... and in the guidance notes for Rule 1 “Members must therefore ensure that all such persons are appropriately qualified.....” and “Members must also ensure that they have the knowledge and expertise to effectively oversee the work for which they are accountable”.

And the Rule 2 guidance also refers to competence.

I would expect Trustees to comply with the ICE Code of Professional Conduct in the role of a trustee as well as in their engineering roles. Does the Commission agree with me on this point?

If so, the Dr. Purkis' comments on the “difficult to uphold” and other issues can be superseded by the Code.

5.3 Analysis and consideration

5.3.1: bullet 1: rubbish..... not the experience of decades of successful governance by a larger Trustee Board.

bullet 2: also rubbish.... why is this different? Once again, not a problem for past Councils (as Trustees).

bullets 3 and 4: No! There is no evidence provided in the Commission Report to support this.

bullet 5: No difference! see my previous comments on this point.

Bullet 6: No need if there is a larger Trustee Board.... cut out the red tape and time gaps this will generate!

5.3.2: I cannot argue with this point, but I think the answer would have been different if the Commission was not

weighted with 3 of the members of Council who actually made the decision to cut the numbers to 12 on the Trustee Board; the ex Chief Exec. of the Royal Academy of Engineering (13 Board members) and the Vice Chair of KPMG UK (13 member board).

5.3.3: I can see that the Commission struggled to find any arguments for a larger board. Perhaps reference to the

various submissions would help them. I can think of another 5 without any difficulty. The Commission has focussed on what might be bad with a bigger board rather than look at the advantages.

5.3.5: Representation.... here we are listening to Dr Purkis again. All this is stating the obvious!

bullet 1: the board size makes no difference

bullet 2: correct.... where have we been all these years?...... all trustees should understand this! The size of the board makes no difference to this point.

Bullet 3: “ trustees sometimes....” again.... what planet are we on? Has there been no training for candidates or successful ones who become Trustees. Once again, it is the Institution which is at fault if Trustees are not aware of their responsibilities.

Bullet 4: so, for convenience only and to just complicate the governance system. There is no justification to split Council into a small Trustee Board and a “consultative” Council. If you want the NEW COUNCIL to have teeth and the be responsible for their actions, then just have the one larger Trustee body! The Trustees are the Trustees... full stop. They make and are responsible for ALL the decisions. Your “new council” may be able to remove trustees somehow, but by then, decisions will have been made.

5.2.6 and 5.3.7: agreed, but the size of the Board makes no difference to this.

5.3.8: the weight of Commission votes might favour a smaller Board, but the weight of argument certainly does not!

5.4 Regulatory Guidance

5.4.2: Para 5.6.2 of the code RECOMMENDS that.....the Commission needs to check the dictionary for a definition of

recommends.... “to advise, to declare to be worth … trying”. The Charity Code was in existence 12 years ago, so was extant when previous governance reviews were carried out. The word “recommends” was not taken as the rule to follow in previous reviews.

“A board of at least five but no more than twelve trustees is typically considered good practice”, yes, good practice, but there are NO comments in the code about larger boards and it does NOT say that larger Boards are bad practice. In fact, hundreds of charities have large boards (see the universities) .... nowhere have I seen these Trustee Boards criticised for their size... in fact, it could be said that the Charity Commission does support charities with larger boards and it certainly does not act against any charities with larger boards.

The Charity Commission was founded in 1853, 25 years after the Institution. The Commission Report does not identify when the Institution became a charity. Whenever it was, that would have been the time for the Charity Commission to comment on the size of the Trustee Board if it had any concerns.

The Charity Commission would have been informed about all subsequent changes in the size of the Trustee Board. so would have had ample opportunity to comment on all the changes at that time if it was concerned about the governance of the Institution.

Note that 5.8.1 in the code says “Trustees receive an appropriately resourced induction when they join the board. This includes meetings with senior management and covers all areas of the charity’s work. Trustees are given the opportunity to have ongoing learning and development”. If they had this, then the trustees would not be struggling to understand their responsibilities and the accounts (as claimed by the Institution).

5.4.3: Dr Andrew Purkis continues to be given too much weight in the Commission findings and in their report.

Bullet 3: this is merely Dr. Purkis' opinion. I have not found such a statement in the code. If the number of Trustees for most, if not all, the universities is over 12, why has the Commission not acted on their own Code? Answer, because the Commission concerns itself with supporting the governance of charities. In any event, is Dr. Purkis (and the Commission) suggesting that the Institution would be non compliant? We have managed well enough for decades.... even two centuries!

5.4.4: perhaps we should all move to Scotland!

5.4.5: could I encourage the Commission members to consider the definition of the words typical and average. The average for trustee boards includes all the ones with 30 or more trustees as well as the ones with only 3.

5.4.6: yes, “even a 25 member trustee Council …...would significantly exceed the guidance....” But, guidance means guidance , not the law. I return to my earlier theme..... the Commission started with a blank sheet of paper..... it spent no time considering the success of previous larger Institution Trustee Councils. I can understand the you might start with a blank sheet of paper if you were starting a new charity. This is not the approach to take for an organisation which is over 200 years old and which has become increasingly successful as the decades have passed!

5.5 Comparator Organisations

5.5.1: I think that the “identification” of the 9 is “selection of the 9”.

5.5.3: Only one member (me) highlighted larger Trustee Boards? Surely not just one person!

5.5.4: again, let us hide behind the convenience of “first-principles analysis”.

5.6 Commission Conclusions

bullet 1: the size of the Trustee Board does not make any difference to these 5 points.

bullet 2: generating a talking shop advisory Council, which it appears the Institution is finding difficult to find a proper role for is a cop out. Just make the Trustee Council larger and avoid the complication of separate bodies.

bullet 3: we appear to be stuck on the definition of “recommended” here once again.

bullet 4: “nine comparator bodies”, but ignoring the successful governance over decades, previous governance reviews and the thousands (I expect) of charities with larger Trustee Boards.

5.6.4 Interim Finding 1: I completely disagree with this finding. The Commission has failed to consider the previous decades of successful Institution governance. A larger Trustee Board worked well, provided a broad church of Trustees, who had the skills to govern their own Institution. It has been a travesty of justice to shrink the Board to 12, particularly so because the reasons to do so were so weak and never backed up by any evidence.

Section 6 Composition and Balance of the Trustee Board

6.1.1:The Institution can solve this problem by returning to a larger Trustee Board.

6.1.3: bullet 3: there is no need to generate a third body. Once again, this is a solution to solve a problem generated by creating the two headed system.

6.1.4: skills gap...... where in the report does the Commission identify the skills required? Where in the report does it comment on any lack of skills in the previous larger Trustee Board? Where is the evidence to demonstrate any lack of skills in past years?

6.1.7: Interim Finding 2: I disagree. P + 3VP + 2 Nomco adds up to 6. requiring only one elected member to support the senior team in a vote. The elected members should comprise at least 75% of the composition of the board. A larger board would facilitate this.

For example, for a proper balance between the Trustees and the P and VPs, if the Trustee Board comprised 23 members (as I have suggested), then P+3VP would be 17% of the Board... a similar percentage to when there were 40 Council members 1P and 6 or 7 Vps.

It is not necessary to have “nominated Trustees” or a “Nomco”.

6.2: Equality of Responsibility

6.2.2: correct, all Trustees have collective responsibility. Read the code! I would expect all trustees to understand that. Some Trustees have particular roles.... that is understood. It would be helpful if the Commission could identify 12 portfolios..... bearing in mind that some roles are taken on by those with particular and relevant experience, or because of their seniority (e.g. Past Presidents).

6.3: Nominated Members

I disagree strongly that there should be a nominated Trustee, let alone 2. There should be sufficient interest amongst our 90000 members to provide a Trustee Board which can run the Institution successfully.... so appointing Trustees (even if, as the Charity Commission says, exceptionally) outside the membership would be seen to be a failing of the Institution.... and also a failing of the small board system. If there is a lack of particular skills, for example when the DG consulted lawyers for advice about the Special General Meeting, then that advice can be sought without putting non members onto the Trustee Board.

If the Commission is concerned about skills on a smaller board (without identifying what those skills may be) then a larger board with a potentially larger skill base would be the solution.

6.4: Other Representation. I see we now have a “Learning Society Committee” again. For once I agree with this. If a staff member who is an Institution member, wishes to stand as a Trustee, then this is the current norm. I guess that we do not have so many Institution members on the staff as we used to.

This whole section misses the point.... the Commission is only discussing this because the new Trustee Board is so small

 

Section 7 Method of Election to the Trustee Board

This is a problem only generated by the recent changes to the Board. I repeat the recommendation in my submission to the Commission:

The Principle that there should be a balance of Trustees representation across membership grades and their location.

The Principle that Trustees are directly elected by members to the Trustee Board (i.e. not via a Council).

The Principle that the President and Vice Presidents comprise no more than 25% of the Trustees.

I repeat: all Trustees have collective responsibility.... and their responsibility is to the Institution, not to particular cohort of the membership.

There is no problem with option A: we are a membership body. All members should aspire to contribute to its governance. A larger Trustee Board and open elections will deliver this aspiration and fair option.

I will not spend time picking through the weak cons bullets.... the Commission should consider how we managed in the past..... this collection of bullets is really a criticism of all trustees who have gone before mixed with the confusion of the separate Council.

Interim Finding 5: NO, NO, NO to the three options recommended by the Commission.

The Institution should return to open elections for all Trustees, with the Exec Committee as before considering candidates for P and VP for recommendation to the Trustee Board.

Section 8 The Nomination Committee

I strongly object to a nomination committee. I was interested to compare the point raised in 6.4.2 with the conflicting representation comments in 8.2.7. A larger Trustee body can accommodate graduate and student members of a Trustee Council,

Why make things complicated when we already had a system which works?

Note too that a small trustee body wipes out the important representation from the regions, both in the UK and overseas.

Interim Finding 6: I disagree strongly with this recommendation. We do NOT need this extra committee.

Interim Finding 7: I repeat, we do not need a Nomination Committee.

Interim Finding 8: The previous exec committee and/or senior staff would often recommend people for these roles for approval, followed by appropriate appointment by Council. This is just a finding which helps to find more roles for the nomination committee.

Interim Finding 9: The President has always chaired Council. The Senior Vice President the Executive Committee. I see no reason to change this. Option A should be applied to a larger council with a small exec.

Interim Finding 10: I support fully.... this was always the case until perhaps recently (since it now has to be spelt out!).

Interim Finding 11: If the system had not changed, the Commission and the members would not have to deliberate on this question. 12 people called Vice President is patently ridiculous. I would like to reiterate my support for a simpler system as sert out in my submission to the Commission “I recommend a maximum of 4 Vice Presidents on the Trustee Board. There might be one additional (light duties) VP who is not a Trustee”.

Interim Finding 12: more here on the “Learning Society”. This set of bullet recommendations has only been brought to the report because of the confusion created by having a small Trustee Board. I recommend that there should be 23 Trustees: President, 4 Vice Presidents, 4 International, 6 UK Regions, 7 Fellows or Members (minimum of 3 Fellows),1 G&S.

Interim Finding 13: we already have chairs for the Diciplinary Board and the Professional Conduct Panel, which used to report through a VP...... so no change here then?

Removing Trustees: I thought this was already possible.

Interim Finding 14: Improve transparency! Great idea. Pity there was no transparency when the original change in Trustee numbers was made.

Interim Finding 15: I thought that this used to happen. In addition, members could attend Trustee meetings.... are they still allowed to do so?

Interim Finding 16: Good idea!

 

Conclusions

I would like to conclude my submission in response to the Interim Report of the Commission by repeating the recommendations I placed before the Commission last February:

Summary of lessons learnt

Lesson learnt 1: The Presidential role is about engagement as well as being Chair of Trustees.

Lesson learnt 2: A larger Trustee Board is the chosen governance model for many charities.

Lesson learnt 3: Institution knowledge, experience and commitment are important criteria for Trustees.

Lesson learnt 4: Different backgrounds and experience should include experience of the Institution.

Lesson learnt 5: Collaboration with, and trust and confidence of, the members (as stakeholders) is important.

Principles and issues:

  1. The Principle that the President should engage fully and directly with the members as a key element of the President Trustee role (i.e. a 3 to 5 days a week commitment).
  2. The Principle that every member elected as a Vice President or President should clearly have demonstrated a significant contribution to the Institution before being considered for such a prestigious and important role.
  3. The Principle that there should be a balance of Trustees representation across membership grades and their location.
  4. The Principle that Trustees are directly elected by members to the Trustee Board (i.e. not via a Council).
  5. The Principle that the President and Vice Presidents comprise no more than 25% of the Trustees.

Options for future governance:

  1. I recommend 23 Trustees: President, 4 Vice Presidents, 4 International, 6 UK Regions, 7 Fellows or Members (minimum of 3 Fellows),1 G&S.
  2. I recommend a maximum of 4 Vice Presidents on the Trustee Board. There might be one additional (light duties) VP who is not a Trustee.
  3. I recommend that the Regions (including international) and Regional Chairs Committee fulfil the role of “consultative council”.
  4. I recommend that the number of members required to call an SGM remains at 60.

I recommend the 5 Principles I have described above.

 

I have not changed my views about the above Lessons Learnt, Principles and Issues and Options for Future Governance.

I find it sad and disturbing that the Commission has ignored the decades of successful larger Trustee Boards.

I find it disappointing that the Commission has concluded quickly that a small board is appropriate. The reasons for dismissing a larger board are weak. Undue weight has been placed on the evidence of Dr Purkis over the evidence of many senior and long involved Institution members.

I invite the Commission to consider this submission and to reconsider their recommendations.

Quentin Leiper

September 2109

 

 

 

 

 

 

 

 

 

 

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