COMMENT As a fellow of the Royal Institution of Chartered Surveyors and a member for more than 50 years, I was quite horrified to read in the press of what can only be described as a scandal.
Four non-executive directors appear to have been fired because they raised concerns that BDO had produced a report that indicated it could be exposed to unidentified fraud and financial misreporting. This is what they are there for – but why are we only now hearing about it? This happened in 2019.
At Palace Capital, we have four non-executive directors for whom I have the greatest respect. They are there to give advice and raise any concerns they may have, holding the executive directors to account. They represent outside shareholders and I look at the former RICS NEDs as representing my fellow members and me. What do the people in charge think they are doing?
I went to the RICS website and found that Chris Brooke, the chair of the governing council, had penned a six-line reply to a Sunday Times article. Not only was it totally dismissive but all RICS members should have been e-mailed by him, setting out why he took the action that he did. It now looks that continuing media pressure may now be having some effect, but should I be hearing all this from the press? What must members be thinking?
No comment
How sad that this great institution is receiving the wrong kind of publicity when it should be on the front foot, particularly in the media, giving its views where it can help its members.
I think of some of the great presidents during my career such as Paul Orchard-Lisle, David Yorke, Idris Pearce, Christopher Jonas, Clive Lewis and Jonathan Harris to name but a few. They were often quoted at the time on important issues but I hear nothing of any consequence now.
I have not seen a comment from the RICS on the moratorium on evictions, the continuing scandal of business rates and particularly empty rates, and how we get people back to the office when working from home for many members is adversely affecting their mental health.
What are members getting for their fees? As Paul Daniels would have said: “Not a lot”.
This takes me back to the 1980s when I was active in the RICS and became chairman of the central London branch in 1986. It was proactive on issues that mattered to members.
We had a strong and widely representative committee and we wanted to see change. As an example, my former firm Sinclair Goldsmith wanted to list its shares on the London Stock Exchange as a means of raising outside capital to facilitate expansion. This was against the byelaws at the time.
This was why, in the early 1980s when Bairstow Eves listed its shares, all its chartered surveyor directors were guilty of a disciplinary offence and lost their membership. This also happened to the partners of Henry Butcher & Co when the RICS found out that in return for a capital injection some years earlier when it was in financial difficulty, a high-net-worth individual who was not a chartered surveyor was granted an equity stake.
Another issue at the time was contingency fees, which were also prohibited by the RICS byelaws.
Stop digging
These were two issues among many, but we lobbied and, with the president and general council in listening mode, changes were made. If this had not happened, we would not have listed in 1987. Would Savills have listed one year after us if its main board directors risked losing their RICS membership?
We not only need an urgent independent inquiry on the BDO issue, but root-and-branch reform is long overdue. Recent media comment indicates that this may now be on the way.
On a personal note, I am hugely disappointed at the turn of events. The president, chair of the governing council and the chief executive should take heed of that wise old saying: “When in a hole, stop digging.”
Neil Sinclair is chief executive of Palace Capital
