Governance

Preamble

The introduction to the paper that 13 Past Presidents submitted to the Council ahead of the meeting on 7 September 2009 included the statement,

“Whilst we are dismayed at, and highly critical of, the decisions and actions that have led to the present situation, our purpose is not to seek an inquest but to find a way forward that achieves the best long term result for the members of the Society and minimises further damage to the Society’s reputation and standing in the world.”

The paper contains a short discussion on governance, an extract from which says,

“We find it extraordinary that the opportunity to increase revenue by letting out office space on the third floor to the casino should result in the contents and staff of the Library and Careers Centre being shipped to Farnborough without any member of Council or any Officer of the Society saying, or having the opportunity to say, that we should consider consulting the members before taking such a drastic step.

The hasty clearing of space on the third floor, driven apparently by opportunism and expediency, is what has precipitated the present situation and the call for a General Meeting. We urge the Council to review these actions and to institute procedures that will ensure that such a thing never happens again.”

At that time we put our faith in the Council reviewing events of the recent past, identifying failures of governance and taking appropriate corrective action. However, the resolutions passed at the meeting of 2 October acknowledge no failures of governance and admit only that,

“....with hindsight, the communication of the rationale behind the development of the National Aerospace Library could have been better presented to the Society’s members.”

We do not consider this to address adequately what we, and many members, regard as a serious breach of trust between the Council and the members on whose behalf it acts. The decision of the Council on 9 November forthwith to suppress any further discussion of this issue in the letters pages of The Aerospace Professional(AP) only adds to our concern. This bulletin therefore sets out, in more detail than we had originally envisaged, our perception of the various departures from acceptable standards of governance over the past year.

The role of the Council

There is no ambiguity in the By-Laws.  The Council has full and final responsibility for the management of the Society and for the actions taken on behalf of the Society members.  The letter in the November issue of AP, from the Past Presidents who do not share our concerns, spells it out:

“There is no doubt that Council has ultimate authority in taking decisions. This is spelt out in both our Royal Charter of Incorporation and our By-Laws, which were revised by the Privy Council as recently as September 2007. These documents make clear that the direction and management of the Society, its affairs and its business, is the responsibility of Council. They also state that the decision of the Council on all matters dealt with by them in accordance with the By-Laws is final and binding on all members of the Society.”

On this matter, we are in complete agreement with our fellow Past Presidents.

The role of the Advisory Committee

The Advisory Committee is not referred to in the By-Laws and it has no powers to commit the Society to expenditure of any kind. Its role is purely advisory. We have the impression, however, that in recent years it has operated at times as an executive committee, making decisions that may or may not be brought to Council for subsequent ratification.    

An example from January 2009 is the extension of the lease from SEGRO to include the Secret Factory, the room adjacent to the NAL, for the Society to use as storage.  The intention of the Chief Executive to sign the new lease was recorded in the minutes of the January meeting of the Advisory Committee and the lease was signed a few days after the meeting. At the Council meeting two months later there was no reference to this action and only those Council members who read the minutes of the January Advisory Committee meeting would be aware of it.

This was clearly a breach of the By-Laws.  By-Law 8(A) (h) states

“....the Council must always .... agree any purchase of real property or leases or the sale or surrender of any real property or its lease.”

This was not done. There is no record in any previous Council minutes of any consideration of the extension of the lease. It is quite possible that the case for enlarging the lease would have been accepted by Council members had it been considered by them. On the other hand, it is possible that some would have argued against it on the grounds that it increased the Society’s long-term financial commitment to the venture at Farnborough without the Council seeing the business case for doing so and without having ever adopted a long-term business plan for the NAL.

The Advisory Committee decision in April

We regard the main failure of governance as the moves of the Library and Careers Centre to Farnborough without prior approval by the Council.

As is traced out in the timeline (Appendix 7A), the Advisory Committee, at its meeting on 28 April, considered a memorandum from the Chief Executive reporting an approach from the casino next door seeking to rent additional space in 4 Hamilton Place. Their preference was for the Library and the Librarian’s office. If extra space could not be found they would move elsewhere and the rental income from the Merlin Room and a fourth floor office would be
lost.

Their request could be met by moving the Library and Librarian to the NAL at Farnborough.  This would require additional space to be leased from SEGRO at a cost the same as the additional rental income from the casino. Letting the third floor rooms to the casino and moving the Library would therefore be revenue neutral.

Rejecting the request from the casino would result in a loss of annual income of approximately £22,000.  Because the license agreement with the casino can be terminated at three months’ notice on either side, the maximum loss of income in 2009 would have been approximately £9,000.

The Advisory Committee placed an action on the Chief Executive to take the matter forward in line with the memorandum. We regard this decision, to move the Library rather than accept this loss, as an error of judgement that seriously undervalued the importance of the headquarters Library to the Society and its members. We would have expected this proposal to be challenged in Council if members had been given the opportunity to discuss it and had been given the full facts.

Part of the justification for the move was the supposed long-term aim to move the remaining library facilities from Hamilton Place to Farnborough. We are aware of no such long-term aim. We know of no Council minuted resolution endorsing this concept. The distinction between the main, working library in Hamilton Place and the Archive at Farnborough was well understood by the NAL Working Group. It was also reaffirmed to Society members on several occasions by clear statements of intent by the Chief Executive in the pages of AP and in appeals for funds as recently as August 2009. Taking decisions on the basis of a long-term aim that has not been endorsed by the Council is a further failure of governance.

We do not know if Advisory Committee members expected this matter to be put to the Council for decision at its June meeting.  The fact that the affected staff were told in May that they should expect to move to Farnborough, but that the matter had not yet gone through the Council, suggests that this might have been the case.

The Council meeting in June

By the time of the Council meeting the plan was firmly in place, subject to final negotiations with Les Ambassadeurs and SEGRO. The meeting would have been an opportunity to inform Council members that it was proposed to move the Library and Librarian to Farnborough and to rent out the third floor rooms to the casino with no net change to the Society’s cash flow.

It is possible that the proposal would have been challenged, leading to pressure to delay any contractual action until there had been wider consultation, given the importance of the question. Delay might have risked losing the rental income from the casino. We do not know whether this possibility had any bearing on the Council not being informed of the plan at its June meeting. However, as the minutes show, questions seeking some clarification of the minimal account in the Advisory Committee April minutes did not produce much enlightenment.  It is difficult to avoid the suspicion that Council members were being kept in the dark. 

Whether the lack of disclosure was by accident or design, we regard it as an egregious breach of good governance.

Events of July and August

When the news of the moves broke in early July a senior Past President wrote at once to the President to express his concern and also alerted other Past Presidents to the situation. There followed a period of intense activity in which letters were written to the President and Council members were phoned to establish the facts.  It quickly became apparent that the move of the Library and the Society’s Librarian had not been discussed at the June Council meeting and Council members thought that we were being alarmist.

The letters to the President called for the move of the contents of the Library to Farnborough to be halted in order to allow time for wider consultation and to avoid the call for a General Meeting that could be expected if the membership were faced with a fait accompli. The issue was discussed face-to-face between one of us and the President on 21 July.  The President insisted that he was unable constitutionally to halt the moves. Given that the Council had had no part in the actions that were in train, we cannot see on what basis he could have made this argument.

Faced with the prospect of a fait accompli, the Past Presidents began at the beginning of August to seek signatures on a requisition for a General Meeting and within a week had collected twice the requisite number. Coincidentally, the Chief Executive was seeking by e-mail the agreement of Council members to an extension both in space and time of the NAL lease with SEGRO. At this stage, the members of Council had not been told of the move of the Library or of its replacement by casino staff. The request for their agreement to the extended lease did nothing to dispel their ignorance on these points. The lease extension was signed in mid August and the new license with the casino was signed at the end of August.

Thus, in mid August, at a time when the contents of the Library had been packed into 800 boxes but no contracts had been signed, it would still have been possible to halt the process. We had insisted that there could be no urgency about the moves and the President, in the discussion with one of us on 21 July, had agreed.  Even in the first week of August, although the Careers Centre had by then moved, calls for a last minute halt to the Library move were still being made and, had they been met, the General Meeting could have been avoided.  To have forced the moves through in the face of the evidence of strong opposition, without any authority from the Council, was a further lapse of governance.

Council meetings in September, October and November

By the time of the September Council meeting the requisition for a General Meeting had been deposited and the President had become more acutely sensitised to questions of governance. The calibre of the support behind the requisition and the strength of feelings of the members who had supported it were made evident in the paper that the Past Presidents submitted to the Council, apparently to little effect. The tasking of three committees to consider three specific issues, as reported in the October AP, did not enable us to withdraw the requisition.  We discuss the consultation on the Library in Appendix 2E. The committee appointed to review the move of the Careers Centre was chaired by the Past President who had attended the Council meeting on that day in order to speak in favour of the move. The question of the balance between using Hamilton Place as a benefit for members as against using it as a source of income was passed to the Advisory Committee, which had determined in April that moving the Library to Farnborough was worth doing in order not to lose the £22,000 a year casino rent. Discussion of governance matters was deferred to a Special Meeting on 2 October.

On 2 October, the Special Meeting of Council was devoted entirely to matters of governance.  The minutes record an early presentation by the Chairman of the Working Group on Governance which concluded that “the Society should aspire to a governance framework that would not have permitted the current issues to arise.”  In our view, that framework already exists in the Charter and By-Laws as they stand. The current issues would not have arisen if the current rules for Society governance had been observed.

After much generalised discussion, the Council arrived at the question of whether the transfer of the Library and Careers Centre to Farnborough was or was not a strategic matter that required a decision by the Council. It was decided by a majority vote that it did not require the authority of Council.

We regard this decision with astonishment. From the level of anger voiced in the responses to the requisition, we believe the majority of Society members will share our view.

The minutes make clear that the rationale for this interpretation of events is that the booklet on the NAL produced by the Society in 2007 contains a foreword by the Chief Executive which states that,

“The ultimate goal of this project is to house the NAL either in a new building or refurbished building at Farnborough.” 

This statement of strategy, written by the Chief Executive and unsupported by any resolutions of the Council, was interpreted by the Council as justifying the Chief Executive treating the move as a simple operational matter that did not require the authorisation, or even the awareness, of the Council.  Tucked inside the NAL booklet was an appeal for funds for the NAL, beginning with the familiar sentence,

“The National Aerospace Library is a new archive established to complement the existing library collections and service at the Royal Aeronautical Society’s headquarters in London.”

The minutes of the October Council meeting record that,

“Dr Steeden drew Council’s attention in particular to the fact that the Foreword highlighted the retitling of the whole collection as ‘the National Aerospace Library’ on 22 June 2006.”

However, Council’s attention was not equally drawn to the assurances given by the Chief Executive fifteen months later in the September 2007 issue AP that,

“I think it is important to emphasise that the Library on the third floor here at Hamilton Place will remain fully operational, to allow members to borrow books and to carry out research.”

In the light of the assurances about the Hamilton Place Library given by the Chief Executive on several occasions in AP, and in the face of the strong reaction of members to the moves being made without prior warning, we are very surprised that the Council felt able to decide that this was a straightforward operational matter for the Chief Executive to determine.

It is clear from the initial reaction to the news that the Library and Careers Centre were being moved, not only of 13 Past Presidents but also of those who signed the requisition, that the moves were regarded as matters of substantial importance to members of the Society.  Many correspondents expressed their anger at the Council for making such a decision and we had to inform them that they were wrong to criticise the Council because that body had had no part in the decision. Since the Council has now retrospectively allied itself with the decision, we can no longer defend it. Society members can look at the facts and make up their own minds.

At the November meeting of Council the further decision was made by majority vote to suppress any further discussion of the two moves in the correspondence pages of AP. This speaks for itself and deserves no further comment.

Other considerations

There are several other matters relevant to this controversy, insofar as they should be taken into account in a well governed society.

• The move of the main Library to Farnborough has been justified to the Council and the members by the untrue assertion that visitor numbers to the NAL at Farnborough exceeded those to the working library in Hamilton Place. In the October AP the Chief Executive said, “Twice as many people now use the NAL at Farnborough compared with those that used to use the third floor library at Hamilton Place based upon available data.” This message was repeated in the letters in the November AP, one from the Chairman of the Governance Working Party, “...far more members are using the library in Farnborough than ever used it in London.  In recent years fewer than one member per day has visited the library in Hamilton Place!” and one from our fellow Past Presidents that provided detailed statistics on Hamilton Place visitor numbers and also concluded that the average of roughly one a day was “..already being exceeded by visits to the library at Farnborough.” It is regrettable that these data have been accepted uncritically and published without qualification, particularly since its publication in the names of the Past Presidents gives the letter credence in the eyes of members.
   
• As was pointed out in the paper that we presented to the Council in September, repeated at the Council meeting and discussed more fully here in Bulletin 2, the great majority of visits to the Hamilton Place library are not recorded in the visitors’ book   Most library visits are made when the member is in the building for another reason, usually a meeting or a conference, thereby avoiding a special journey. The “available data” used to support the case for a move was drawn from the Hamilton Place visitors book and substantially underestimated visitor numbers to the Library. The recent visitor numbers to the NAL over the past month have averaged around 2 per day, roughly double their level before the move of the working library Farnborough. Approximately one third of the recorded visitors to the Hamilton Place Library and the great majority of the 80% or so unrecorded visitors were Society members, whilst the visitors to the NAL are divided roughly 50/50 between members and non-members. The use of the Society Library by members has thus fallen by something between 50% and 80% as a result of its relocation.
   
• The letter from the Past Presidents in the November AP asserts that the Careers Centre is “... already operating very successfully at Farnborough.” We explain in Bulletin 4 why we understand that this is not the case.
   
• There is no reference in any Council or Advisory Committee minutes to discussion of the impacts of the moves on the staff involved. Our fellow Past Presidents point out that the External Affairs manager has been operating out of Farnborough for the past 18 months but do not note that, because he lives locally, commuting to the Hub has been for him an improvement on commuting to Hamilton Place. For the members of the Library and Careers Centre staff, however, the move has required each way journeys to work of in one case two hours and in the other two and a half hours. We regard this as an imposition on staff goodwill that in a well governed society should not happen without at least some discussion in the Council.
   
• The questions of (a) giving up a high quality part of the headquarters building to semi-permanent lodgers, and (b) accepting the staff of a casino as the lodgers, are clearly a matter of concern to many members. Whilst not universal, there is fairly widespread concern at a learned society and registered charity, incorporated under Royal Charter, giving over a prime part of its headquarters to a casino. These are in our view strategic questions that should have been considered by the Council before action was taken. We consider the signing of the license with the casino without either consideration or resolution by the Council is a further breach of the By-Laws.
   
• There is no record of any consideration by either the Advisory Committee or the Council of the possible impact of the moves of the Library and Careers Centre on the recruitment and retention of members. There are reasons to expect it to be adverse

Conclusion

What began, in our view, as an error of judgement and an excedence of its legitimate role by the Advisory Committee was compounded, by denial of information to and the avoidance of discussion by the Council, to become a serious failure of governance. The Council had no role in its being bypassed.

However, by retrospectively determining that the movement of the Library and Careers Centre were operational matters rather than of sufficient importance to members to be considered strategic, the Council has itself, in our view, put the governance of the Society further in question. We simply do not believe that the majority of members will share the view that these moves were not of sufficient importance to merit the attention of the Council.

The decision to suppress further discussion of the subject in AP only makes matters worse.

Appendix 7A Timeline