Updated: Oct 1, 2021
The Governing Council of RICS has published the Independent Review by Alison Levitt QC into the events that took place following the commissioning of a Treasury Management audit in 2018 and has voted to accept all her recommendations.You can find the outcome in this video.
In my role as a member of the Governing Council I was an elected member of a Steering Committee (SteerCo2021) to act as the point of contact for the Independent Review Team and the solicitors.
The 467-page report concludes that four non-Executive Board members, who raised legitimate concerns that the audit had been suppressed, were wrongly dismissed from the Management Board and that sound governance principles were not followed. The report finds that the origins of what went wrong lay in the governance architecture of RICS. A lack of clarity about the roles and responsibilities of the Boards, the senior leadership and the management left cracks within which the Chief Executive and his Chief Operating Officer had become used to operating with little effective scrutiny. Although they believed they were acting in the best interests of RICS, they were resistant to being challenged. When non-Executive members of the Management Board insisted that they should have sight of internal audit reports and refused to back down it became a “them or us” situation. The report concludes that this was not a cover-up as much as a power struggle. The Executive used the governance structure as a fig leaf for its actions and showed a collective failure of common sense in allowing the situation to escalate unnecessarily. RICS was not well served by its lawyers who should have given objective advice but saw their role as being to protect the Executive. Ms Levitt entirely exonerates the four non-Executives dismissed from the Board and says they would have failed RICS if they had backed down. The BDO audit, which raised serious concerns about Treasury Management controls, was received by the Chief Operating Officer in December 2018, but not shared with the Management Board until seven months later.
Governing Council was unaware of the report’s existence until it learned of the non-Executives’ dismissal in November 2019 and was not shown it until January 2021. Contrary to what was later claimed publicly, Governing Council was not “kept fully informed”. Because the constitution and structure are the root cause of what went wrong in 2019, the report says there is a real risk that if it is not dealt with something similar could happen again. The report’s main recommendation is for a wide-ranging external review of purpose, governance and strategy, led by an independent reviewer, such as a retired senior civil servant. The Governing Council has committed to implementing all the report’s recommendations and has issued a formal apology to the four non-Executive directors and offered to reimburse their legal fees. It has also apologised to members of the GC2019 group who were incorrectly threatened with legal action and also offered to reimburse their legal fees. Prior to the report’s publication, CEO Sean Tompkins, President Kath Fontana, Interim Chair of Governing Council, Chris Brooke, and Chair of the Management Board, Paul Marcuse have also stood down from their posts. Amit Shah, the Chair of the Audit Committee, has come to the end of his term.
The largest part of this text is from official RICS press statement