Levitt’s warts-and-all report must lead to real change at the RICS

Note the grandeur in the name: the Royal Institution of Chartered Surveyors. It boasts roots going back to the 18th century, and on its website is an explanation of the significance of its royal charter: an antiquated concept, it concedes, but one that retains its “cachet in the modern professional world as a ‘gold standard’ of excellence and integrity”.

Many will be questioning that gold standard after last week’s bombshell when Alison Levitt QC published her independent review into events that followed a supressed audit report in 2018. The drama unfolded on Thursday at a virtual press conference, before which there had been leaks that chief executive Sean Tompkins would be stepping down. As it turned out, that day claimed four senior scalps: Tompkins did indeed resign but so too did president Kathleen Fontana, Chris Brooke, interim chair of governing council, and Paul Marcuse, chair of the management board.

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And when journalists and RICS members had had a chance to run through the report’s findings, it was clear why heads had to roll. Levitt was damning in her appraisal of how the institution dealt with the four non-executive board members who had raised legitimate concerns about the audit report that was kept under wraps. They had been wrongly dismissed and proper governance procedures had not been followed.

She found that the governance structure was used as a pretext “to justify withholding various reports until the executive put in place remedial measures”. A lack of clarity around roles and responsibilities meant the chief executive and chief operating officer (Violetta Parylo, who resigned in June) operated with little effective scrutiny and became resistant to challenge. While Levitt was careful to point out the individuals involved believed they were acting in the best interests of the RICS, and that their behaviour did not amount to a cover-up, there was a power struggle between executives and non-executives.

If that was not worrying enough, the actual process of drafting her report proved difficult. Levitt felt the RICS made it hard for her to gather the evidence, delaying publication of her review, and leading her to conclude that there was a disconnect between the governance body that hired her and the management team.

Her 16 recommendations covered a whole range of problems she identified relating to governance, executives’ remuneration, whistle- blowing and the organisation’s use of legal advisers. She also called for public apologies to the wrongly dismissed non-executives.

Some of these recommendations seem pretty basic, and the mind boggles that it takes a QC to point out the obvious – for example, how minutes are to be distributed and the frequency of management board meetings.

But the biggest and over-arching recommendation goes to the heart of the matter – the governance structure, which Levitt says must be subject to a wider external review that would look into the RICS’s purpose, governance and strategy.

In many ways, Levitt’s findings are a vindication of what members have been saying for months, if not years

The RICS governing council has accepted the recommendations in full. Now it’s down to Nick Maclean, chair of the steering group for Levitt’s review and temporary chair of the governing council, to put things right. The first step will be finding a suitable independent retired civil servant to conduct that wider external review.

RICS members we have spoken to seem pleased at the frankness of the Levitt report and welcome the recommendations, but they are hardly surprised and they are certainly not happy it has come to this. In many ways, Levitt’s findings are a vindication of what members have been saying for months, if not years.

Our own reader consultation back in March this year brought to light some of the deep-seated resentments that had been brewing around executive salaries and bonuses. Members demanded financial transparency and questioned the value of the services their annual membership fees supposedly paid for. Many called for the senior leadership to resign over the audit report debacle, while pointing out that that the RICS’s launch of its internal Defining our Future review, led by Tompkins and Fontana, was a sure way for vested interests to get the answers they wanted. Levitt very much picked up on this feeling, saying: “It is wholly foreseeable that a review which puts in charge of change the very people who are perceived to be part of the problem will fail.” Hear, hear!

So what now? Maclean says he is focused on culture change and making sure the RICS becomes fit for purpose. Members could be forgiven for saying they have heard it all before – after all, as Levitt points out, governance reviews of one sort or another have been a constant for the past decade at the institution. But perhaps her warts-and-all report changes things; at the very least it has forced the RICS to confront some unpleasant truths about itself. What we know for sure is that members want a more transparent organisation representing them and they want to be listened to. As ever, we want to hear your views, so do get in touch and tell us what you think will be the best way forward from here.

Chloë McCulloch is the editor of Building