In the wake of a governance crisis that sent waves across the industry, the RICS is now at a critical turning point.
Interim chair of governing council Nick Maclean and interim chief executive Richard Collins have been appointed to the top jobs for only up to a year, but the duo are determined to make every moment count as they set out to rebuild confidence in the professional body.
“We have issues to fix, but the potential of the profession is limitless if we can support the institution properly,” says Collins, who was previously executive director of the profession at the RICS.
Along with Savills director Isobel O’Regan, interim chair of the management board, the new team’s top priority is to implement all of Alison Levitt QC’s recommendations from her damning report into the organisation’s governance crisis. This is followed by re-engaging with the membership, which Collins says has “drifted apart” from the institution.
The search for a permanent chief executive will not begin until after the new external review into governance, strategy and purpose, as its outcome could affect the nature of the permanent job.
“There’s a range of choices professional bodies can have around the kind of role that they want leading the executive side of the organisation,” says Collins.
Separately, the RICS is taking legal advice from Squire Patton Boggs on the “appropriate steps to take” against “a number” of individuals and organisations that had a part to play in the governance crisis, according to Collins. This involves assessing its own responsibilities as a chartered institute and whether it possess information that suggests they should be reported “to their professional bodies”. Law firms Fieldfisher and Sheridans were among the firms named in the report.
“It’s really important that any steps we take in that regard are seen to be purely based on the assessment of what’s in the public interest,” says Collins. “I think there’s a higher obligation on organisations that are themselves regulators to report these things to other regulators, but we’ll be making those decisions in due course.”
In terms of personnel, chief people officer Marina Kilcline stepped down from her post last week, as revealed by EG earlier today. Kilcline was part of the leadership team criticised by Levitt in her report. Separately, the general counsel mentioned in the Levitt report is still employed at the institution. It is understood that she is on extended sick leave.
Property’s calls for action
While far-reaching reform is on the agenda, the interim leadership is under pressure to match its pledges for change with equally strong actions.
Among the “hundreds” of letters that Maclean has been responding to during his evenings and weekends, one of the most significant has been the Property Advisors Forum’s open letter, signed by top executives at the 14 biggest agents in the UK.
In it, the PAF (formerly known as the Windsor Group) urged the RICS to repair its reputation by focusing on establishing itself as a thought leader in key issues affecting the built environment; attracting the next generations of talent through initiatives such as school outreach programmes; and becoming a champion for diversity and inclusion.
However, Collins and Maclean contest that “poor communication” is to blame for inadequately demonstrating the RICS’s existing efforts on the first two points.
Collins says: “If you look at the material that we produce and the people we collaborate with, it’s actually quite impressive. We’re not very good in communicating about that work. We are also not sufficiently successful in leveraging the input of our members… [or linking] their insights and the solutions they can offer with governments and global institutions.
“It shouldn’t be about the RICS being seen as a thought leader. It’s the work we can do to facilitate members being seen as thought leaders. That’s very much where we want to position things.”
Where outreach programmes are concerned, Maclean, who is also managing director of CBRE’s Middle East division, says the RICS hides “its light under a bushel”. However, he thinks its efforts in this space could be vastly improved with better collaboration with the PAF.
“One of the opportunities we perhaps missed is that we have limited resources, where [the PAF] has tremendous resources,” Maclean says.
Collaboration with firms, educators and wider industry groups will also be key to cementing the RICS’s role as a diversity and inclusion champion, according to Maclean.
“I’ve chatted to [Cushman & Wakefield’s] George Roberts and other members of the [PAF] quite a lot over the past three weeks or so, and we know where we’ve got to get to,” he says.
Mystery around bonus deepens
The organisation has vowed to ensure that past actions “are not repeated in the future”. That said, there are some questions around previous conduct that remain unanswered.
The events that sparked the governance crisis stem from a cash shortfall in 2018, prompting the organisation to almost double a £4m overdraft facility quietly. One of the causes was a “completely unexpected” and “unbudgeted” £400,000 discretionary bonus agreed with former chief executive Sean Tompkins.
Levitt did not investigate the bonus in her report, and Collins is unable to clarify how the payment was justified. However, he is adamant the £400,000 ultimately never reached Tompkins, despite the management board being informed otherwise at the time.
“I’m unable to get that link between why the management board was told that, and the actual payments made,” admits Collins. “What I have been able to assess… is that the actual bonuses were accurately reported in the remuneration reports for the years in question.
“I’m not sure, given the number of people that have left the institution, and the fact this was the back end of 2018, that we will ever be any clearer [on what happened]. But I am clear about the actual level of payments made to people, because they’re recorded in our accounts. The one thing I can’t reconcile is that £400,000 figure in the report that went to the management board.”
Despite the substantial bonus payments that Tompkins and other members of the executive team will have received in recent years, Collins says it is “unlikely” that the RICS will ask them to forfeit any on account of contractual provisions applied at the time.
Mending membership ties
Maclean is also keen to ensure that the RICS becomes representative not just of the interests of its UK members, but “all components” overseas. Around 65% of its members are based in the UK.
“My personal view is that there was too much centralisation of authority and a reduction in the autonomy of some of the boards that represented the members in several locations, whether it’s in Scotland or Wales or Ireland or in the UAE,” he says. “We’re engaged in a process of re-empowering some of those local decision-makers to make sure the RICS is relevant to people in various marketplaces.”
With reform on the horizon, the RICS could end up looking quite different by the end of next year.
One aspect Maclean is certain of, however, is the RICS’s future as a subscription-funded, self-regulating organisation.
“I think you will see some changes coming over the next 12 months or so that will make it more reactive to what members want,” says Maclean. “Part of the criticism we’ve seen is that people are suggesting the governing council is not representative of the members, despite a fairly comprehensive election process.
“We need to get the message across that it is actually is pretty representative. Whether or not the structure or size of governing council is correct is open to debate… but I have no doubt the institution will continue to be a member-funded organisation.
“We’re very conscious of the fact that we have a responsibility to spend my colleagues’ – and other members’ – monies very wisely and carefully.”
He adds: “I hope people seeking not to renew this round will see, in a year’s time, that this is actually a pretty good place, and there has been quite a lot of progress and they come back to us.
“There was a feeling there were things that were not quite right, that a lot of people have known about for some time. We hope the reasons for that have gone away now, and it’s now for us to rebuild.”
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