Four senior figures at the Royal Institution of Chartered Surveyors (RICS) have resigned after a damning independent review into corporate governance at the body.
RICS chief executive Sean Tompkins, president Kath Fontana, interim chair of governing council Chris Brooke, and chair of the management board Paul Marcuse, have all resigned following the publication of the 467-page report, following a review chaired by Alison Levitt QC.
The report was commissioned after RICS was engulfed in a scandal in 2019 when four members of the body’s governing council were dismissed after they learned of a 2018 report by accountant BDO warning that the organisation was at risk of “fraud, misappropriation of funds and misreporting of financial performance”. The four – Amarjit Aktar, Bruce McAra, Simon Hardwick and Steve Williams – raised concerns that the report had not been shared more widely beyond the audit committee.
The BDO audit, which was received by the chief operating officer in December 2018, was not shared with the management board until seven months later.
Levitt’s report found that a lack of clarity at RICS about the roles and responsibilities of the boards, the senior leadership and the management left “cracks” within which the chief executive and chief operating officer “had become used to operating with little effective scrutiny”.
The report found that although the directors believed they were acting in the best interests of RICS they were “resistant to being challenged”.
When the non-executive board members insisted they should have sight of internal audit reports and refused to back down, it became a “them or us” situation.
Executive power struggle
The report found that the situation was “not a cover-up as much as a power struggle”, with the executive using the governance structure as a “fig leaf” for its actions.
Levitt exonerated the four non-executives dismissed from the board in full and said they would have failed RICS had they backed down.
Levitt’s report recommended a wide-ranging review of purpose, governance and strategy at RICS, led by an external reviewer such as a retired civil servant.
Meanwhile, RICS’ governing council has issued a formal apology to the four non-executive directors and offered to reimburse their legal fees.
“This has been a sad and depressing episode in the life of a great Institution. I am confident that with courage and imagination, an independent external governance review will be able to put RICS into the position of moving forward in unity in the public interest.”
A process is now underway to appoint an interim CEO at RICS, while Nick Maclean, who led the steering group for the independent review, has been appointed temporary chair of the governing council.
Maclean said: “We are grateful to Alison Levitt QC for her very thorough report and have accepted her findings in their entirety. We commissioned an independent reviewer because we are committed to fostering a culture of openness and transparency and that is why we have published it in full.
"Whilst her report makes uncomfortable reading it provides us with an opportunity to implement far-reaching reforms and establish RICS as the gold standard for professional bodies, which will regenerate our historic institution.
“I have personally apologised to the non-executive board members who were unfairly dismissed on behalf of RICS and would like to repeat this apology publicly, as well as apologising to members of the GC2019 group who were improperly threatened with legal action.
“We have accepted the decisions of the CEO, president, chair of governing council and chair of the management board to stand down and thank them for their service. I can promise our members and staff that we will have an open dialogue about our plans for the new, external review of our organisation and about other changes we implement to address the failings identified in the report.”
Alison Levitt QC said: “RICS is an organisation about which its members are passionate. Whilst those who provided evidence to me disagreed about a great many things, there was one subject which united them, namely the sense of pride they felt at being members of RICS.
“This has been a sad and depressing episode in the life of a great Institution. There is a yearning to return RICS to a position of pre-eminence in professional membership organisations. I am confident that with courage and imagination, an independent external governance review will be able to put RICS into the position of moving forward in unity in the public interest.
“My report has not made easy reading for the governing council of RICS, which has shown courage, leadership and a real commitment to transparency by publishing it in full. I am pleased that it is adopting all my recommendations without delay.”