CII Group Board announces its intention to appoint a majority of directors to the PFS Board and appoints three new Institute Directors with immediate effect

Helen Phillips, CII Group Chair, said: “This is not an outcome the CII Group Board wanted or pursued. The CII team has worked hard for many months, initiating independent mediation, and responding to the PFS Board’s demands diligently, professionally and with immense goodwill. Therefore, it is deeply disappointing that independent mediation has failed, and serious and significant governance failures have arisen, which leave the CII Group Board with no alternative but to take this action at this juncture and resolve matters without further delay.”

The PFS is a subsidiary of the CII Group, and the PFS’ articles of association give the CII Group Board the right to equalise and/or appoint a majority of directors to the PFS Board.

The PFS Board is currently made up of five PFS Member Directors and two Institute Directors. Today the CII is announcing the appointment of three further Institute Directors, who together will equalise the PFS Board with immediate effect. The new PFS Board Institute Directors are:

• Sarah Howe, former CEO of Harpenden Building Society, former Independent Chair of the Consumer Panel at Openwork, one of the UK’s largest financial advice networks, and recently appointed to St Clare Hospice board.
• Neil Watts, former Board Member of the Office of the Qualifications and Examinations Regulator (Ofqual), former Board Member of the Architects’ Registration Board (ARB) and former Advisory Board Member for Cifas, as well as former Complaints Committee Member at the Independent Press Standards Organisation (IPSO)
• Azlina Bulmer, former Director of International at the Royal Institute of British Architects (RIBA), current Associate Non-Executive Director at Harrogate and District NHS Foundation Trust, and existing CII Membership and Engagement Director.

Alan Vallance, CII CEO said: “Sarah, Neil and Azlina all bring immense professionalism and exceptional experience to the PFS Board. The newly composed Board will continue to be mandated to focus entirely on protecting and serving PFS interests. The CII team will work with the new PFS Board to embed best practice and establish the long-term governance arrangements that will ensure PFS members receive all the services and support they deserve without any further delay.”

To guarantee the highest standards of governance and in accordance with the PFS’ articles of association, after a 30-day consultation period has elapsed, the CII Group Board intends to form a majority by appointing a further Institute Director to the PFS Board.

Phillips concluded: “The CII Group Board remains deeply committed to its PFS members. The PFS is a critical part of what we do and an essential voice for advice. Now more than ever, it is important that all our time, energy and resources are fully invested in building a stronger future, and delivering exceptional services, for our PFS and CII members.”

There is no change to any of the services received by PFS members. The CII Group will continue to provide and maintain all PFS member services. The CII Group will continue to deliver, as normal, all PFS qualifications, exams, certificates, training, events, and the statements of professional standing, as well as all operational functions, including marketing, HR and IT.

 

FAQs

 

Q1: What have been the governance failures?

The CII Group Board identified a range of issues that include, but are not limited to:

• a failure to act in line with the Articles of Association approved by PFS members;
• a lack of collective decision making by the PFS Board;
• the exclusion of Institute-appointed directors from PFS Board meetings and decision-making processes;
• the inappropriate establishment of at least one sub-committee, which is directing work without proper authority from the PFS Board or input from the CII as required under the PFS Board’s Terms of Reference.
• a group of PFS Board members pursuing actions without full Board authority that have led to significant expenditure on external advisors that is substantially above agreed limits;
• the PFS Board seeking to exclude the CII Group Audit and Risk Committee from oversight of audit and financial statements;
• the PFS Board reappointing expired Board members by co-option rather than rotating the membership of the Board.

These failures were repeatedly raised with the PFS, but they were neither acknowledged nor acted upon. Accepting these serious governance risks was not acceptable to the Institute’s Group Board, which was left with no alternative but to act decisively in the best interests of members.

 

Q2: Are PFS members represented on the CII Board?

There are currently three PFS members who sit on the CII Board.

 

Q3: Is this action about ‘deregistering’ the PFS?

There is no plan whatsoever to deregister the PFS. The CII sees no merit in such a move. Indeed, we want to see PFS Ltd flourish as a professional membership body within the wider Institute Group of companies. The action we have taken is about strengthening governance within the PFS and ensuring a robust governance foundation for the future.

 

Q4: How will these changes to the PFS Board impact services to PFS members?

These appointments are about strengthening the governance of the PFS Board. The changes to the PFS Board will not change the day-to-day provision of services to PFS members. As has been the case for many years, the CII will continue to provide all the PFS qualifications, exams, certificates, training, events, and the statements of professional standing, and is fully committed to working with the PFS Board to ensure that PFS members receive the support and services they rightly deserve.

 

Q5: Are you appointing more Institute Directors to the PFS Board because you want to control the PFS reserves?

The action we have taken to appoint new Institute Directors is solely about addressing governance failures by the PFS Board. The PFS reserves are and will continue to be invested in services provided for, and used by, our PFS members.

 

Q6: How will CII work with PFS Board going forward?

As we have done for decades, the CII will continue to work with the Boards of all the companies within the CII Group, serving and protecting the interests of all our members.

 

Q7: What is happening and why? 

The CII has been working with the PFS Board for many months, seeking to resolve complex and historic financial issues. Today [21 December 2022] we informed the PFS Board of our intention to appoint a majority of directors to the PFS Board, as well as our decision to equalise the PFS Board with immediate effect.

This is not an outcome the CII Group Board wanted or pursued. The CII team has worked hard for many months, initiating independent mediation, and responding to the PFS Board’s demands diligently, professionally and with immense goodwill. Therefore, it is deeply disappointing that independent mediation has failed, and serious and significant governance failures have arisen, which leave the CII Group Board with no alternative but to take this action at this juncture and resolve matters without further delay.

 

Q8: Who is being appointed to the PFS board?

The PFS Board is currently made up of five PFS Member Directors and two Institute Directors. Today [21 December 2022] we are announcing the appointment of three further Institute Directors, who together with existing Institute Directors Gill White and Mark Hutchinson, will equalise the PFS Board. The new PFS Board Institute Directors are:

• Sarah Howe, former CEO of Harpenden Building Society, former Independent Chair of the Consumer Panel at Openwork, one of the UK’s largest financial advice networks, and recently appointed to St Clare Hospice board
• Neil Watts, former Board Member of the Office of the Qualifications and Examinations Regulator (Ofqual), former Board Member of the Architects’ Registration Board (ARB) and former Advisory Board Member for Cifas, as well as former Complaints Committee Member at the Independent Press Standards Organisation (IPSO)
• Azlina Bulmer, former Director of International at the Royal Institute of British Architects (RIBA) and our existing CII Membership and Engagement Director.

Sarah, Neil and Azlina all bring immense professional experience and exceptional expertise to the PFS Board. The newly composed Board will continue to be mandated to focus entirely on protecting and serving PFS interests. The CII team will work with the new PFS Board to embed best practice and establish the long-term governance arrangements that will ensure PFS members receive all the services and support they deserve without any further delay.

The CII Group Board intends to form a majority by appointing a further Institute Director to the PFS Board, after due process has been followed and the 30-day consultation period outlined in the PFS’ articles of association has elapsed.

 

Q9: What authority does the CII Board have to take this action?

The PFS is a subsidiary of the CII, and Article 9.14.1 of the PFS’ articles of association gives the CII Group Board the right to appoint a majority of directors to the PFS Board.

 

Q10: Who makes up the current PFS Board?

The PFS Board is currently made up of five PFS Member Directors and two Institute Directors.

• PFS: Vanessa Barnes; Caroline Stuart; Gordon Wilson; Elizabeth Bastin; Anthony Ward;
• CII: Gillian White; Mark Hutchinson

 

Q11: What action will the CII Board take once it achieves a majority on the PFS Board? What does this mean for the PFS and its members?

When the CII Board appoints further Institute Directors to the PFS Board, they will continue to be mandated to focus entirely on protecting and serving the PFS interests.

There will be no change to any of the services received by PFS members, which the CII will continue to deliver as normal, including all qualifications, exams, certifications, training, events, and the statements of professional standing.

For the avoidance of doubt, the PFS is a legal entity, but every other aspect of the PFS’s offering is provided by the CII. The breadth of PFS member services are, and have always been, delivered and maintained by the CII. CII employees also provide all the services required for the PFS to function, including corporate governance, marketing, HR and IT.

 

Q12: Why does the CII Board consider it necessary to take this action (i.e. hold the majority of the directors on the PFS Board)?

This is not an outcome the CII Group Board wanted or pursued. However, after many months of responding to the PFS Board’s requests diligently and professionally, recent governance failures within the PFS Board, have left the CII Group Board with no alternative but to take this action and resolve matters without further delay.

 

Q13: What happens when/after the Notice is formally issued?

In accordance with Article 9.14.2, following receipt of the Notice from the CII Board, the PFS Board can consult between themselves and the PFS members in relation to the matters which have given rise to this action.

This consultation period starts one business day after the date of letter from the CII Board and expires 31 days after the date of that letter. Following the expiry of the consultation period, the PFS Board has a feedback period of 7 days, in accordance with 9.14.3, to meet and discuss the results of the consultation. This feedback period commences on the day after the date of expiry of the consultation period and expires 7 days later.

 

ENDS