Alot has happened since my last post on the RICS.
The CEO, President and several board members "stepped aside" from the Royal Institution of Chartered Surveyors last week in the wake of the Levitt review into concerns over its corporate governance. The resignations came as the report, published on 9 September, said the confusing structure of the RICS meant it was an "accident waiting to happen" (which presumably is what happened!).
The governing council said it would be accepting all recommendations, including agreeing to undertake a second external review likely to be headed up by an independent civil servant with the aim being to improve the RICS's leadership set up, purpose and strategy.
A previous report from accountant BDO had spotted the very poor corporate governance systems within its management and administrative structures. Non-executive directors — Amarjit Atkar, Simon Hardwick, Bruce McAra and Steve Williams — had also identified that this report was then being internally suppressed as long ago as Nov 2019 and they were consequently removed from their posts for not dropping this when encouraged to do so.
The 467-page "open" report concluded that the four, who had raised legitimate concerns that the audit had been suppressed, were wrongly dismissed from the management board and that sound governance principles were not followed. RICS has since issued a formal, public apology, as directed to do by the report.
The report finds that the origins of what went wrong lay in the leadership structure of RICS. A lack of clarity about the roles and responsibilities of the two boards, the senior leadership and the management "left cracks" within which the chief executive and the chief operating officer had become used to operating with "little effective scrutiny".
Levitt said she believed the management thought they were acting in the best interests of RICS, but had become resistant to being challenged. She added that when non-executive members of the 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 it was not a cover-up but a power struggle with the executive using the governance structure as a "fig-leaf for its actions".
Some big questions now face the (new) RICS management; including how to rebuild trust within its membership (initially perhaps by establishing an independent body for members to whistleblow to) and also how to align properly all the various stakeholder interests. It will take time. Pride in RICS membership seems to remain still but the recent lack of transparency and unpallatable power struggle at board level will take time to forgive.
Hopefully though the RICS will start to move forward positively and regain the confidence of their membership. After all, the RICS did commission this report and then were actually brave enough to publish it!