Can the RICS become fit for purpose again?

It was last December that the first details of a scandal that has since engulfed the RICS began to surface in the Prufrock column in the Sunday Times. The following month, the newspaper revealed in more detail that a financial report into the RICS’s treasury management processes had not been shared beyond its audit committee.

I recall reading the spread, written by a journalist with whom I had shared lunch some time previously. He was not at all a tabloid type; indeed I recall that he was more intellectual and urbane than I had been expecting.

His view of the RICS published that Sunday morning however was explosive. He – rightly, as it has turned out – chronicled the mis-steps, errors, obfuscation and chicanery present at the institution of which I have proudly been a member for over 40 years and to whom my organisation pays vast sums in subscription fees for our employees and which now appears to be in meltdown.

The mass resignation of the senior management team at a professional body enshrined by royal charter with a 152-year pedigree – and one that is the world authority on standards and qualifications in building surveying – is unheard of in modern times and deeply depressing.

The RICS brand has undoubtedly been tarnished and one can only hope that the forced departure of the quartet will draw a line under the matter

To put this all into context, in the official report into the mismanagement at the organisation published by Alison Levitt QC last Thursday she said she found nothing to suggest any criminal wrong-doing at the RICS. But the fact that this is seen as a small shaft of sunlight in an otherwise dark critique of failings is astounding in itself.

The 130,000 members can apparently breathe a sigh of relief because a learned QC absolved the CEO, president, chairs of the governing council and of the management board of breaking the law. Is it really good news that they have only been found guilty of mismanagement and acting far beyond their remit?

It is certainly true that they will not end up in a court of law, but the response to their failings in the court of public opinion … that is a different matter. The RICS brand has undoubtedly been tarnished and one can only hope that the forced departure of the quartet will draw a line under the matter.

> RICS governance scandal: Coverage all in one place

However someone once said, “never waste a crisis” and I believe and hope that this unfortunate debacle will prove to be a Damascene moment for the RICS. It is supposed to be a member representative body dictating, governing and controlling professional standards on behalf of its members. Unfortunately the nature of the organisation is not unlike the relationship between elected politicians and the civil service.

Like the civil service the staff at our professional institutions tend to be on long-term contracts, almost a permanent fixture. The members involved in the organisation, by comparison, are usually around for only a short time.

Now is the chance to affect serious change and restructure so that this never happens again

They rise through committees, working-groups and the presidency and are regarded as a non-executive, impermanent and – it would seem from the Levitt report findings – clearly regarded as inferior by the staff, who often consider themselves to be the true decision makers. This is certainly what appears to have happened at the RICS, with internal management appearing to preside over a culture in which members were attacking members.

Now is the chance to affect serious change and restructure so that this never happens again. I am not sure that asking the organisation to look at itself is the answer. It needs a fresh view from independent outsiders who have no axe to grind.

For instance, some of the sums that have been allowed to be spent in recent times have been eye-watering – with the former chief executive apparently having been in line to receive £260,000 in bonuses for instance. That this might have been sanctioned while the RICS was making a pre-tax loss of £4.7m on £91.3m is frankly quite ridiculous.

It is not just the large property agencies that will want to affect change. Everybody associated with the RICS will be expecting major root-and-branch reform. The “it was just a few bad apples” argument will simply not hold water.

In her report Levitt concluded that the body’s constitution had led to a lack of clarity about the roles and responsibilities of boards, senior leadership and management which had in turn bred tension. Those of us who have been proud to be members and view this latest debacle with a sense of despair, would tend to agree that the over-arching principle guiding any future review has been well articulated by the chair of the steering group charged with implementing change.

Is the RICS fit for purpose and can it legitimately see itself as an industry leader? As one of Levitt’s fellow QCs might opine, the jury is still out.

Richard Steer is chairman of Gleeds Worldwide