Motion 5

 

This meeting has no confidence in the current President-Elect in discharging his senior roles and responsibilities as a Trustee.

 

  • Failure to protect the financial interests of the Institution

 

  • Responsibility for the reputational loss resulting from the failure and subsequent liquidation of Amber Train 

 

  • Complicit in failure to provide to members a fair and transparent view of the financial position

 

  • One of the prime instigators in the attempt to constrain the President from exercising her duties and responsibilities

 

 

The Institution’s document “Trustee Role Profile” spells out the statutory duties of a trustee and is the standard against which the behaviour and performance of our current President Elect should be compared.  The statutory duties for a trustee include:

 

“To ensure that the Institution uses its resources exclusively in pursuance of its objects: the charity must not spend money on activities which are not included in its objects”

 

         “To safeguard the good name and values of the Institution”

 

         “To ensure the financial stability of the Institution”

 

 

Why do we have no confidence in the current President Elect?

 

The current President Elect has been a member of the Trustee Board for several years rising to the senior position of President Elect after holding positions of influence as a Vice President and Chairman of several of the Institution’s Boards.  Currently, he also holds the position of Chairman of the Strategy Advisory Committee which supports our Council in determining strategy and long-term direction and is the key Trustee responsible for liaison between the Council and the President.  Our President Elect has therefore been intimately involved in supporting the direction of travel of the Institution over recent years, for the use of the Institution’s resources in following that path and for the damaging consequences that have ensued, both financial and reputational.

 

Use of the Institution’s resources

 

The sale of the Institution’s publishing business in 2010 converted an asset of the Institution into cash, received in the form of an up-front payment of approx. £11m followed by staged receipts over the following 5 years amounting to a further £10m, around £21m in total.  The cash from this asset sale was a substantial Institution resource which the Trustees were required to ensure was used “exclusively in pursuance of its objects: the charity must not spend money on activities which are not included in its objects

 

 This is specifically referred to in the Royal Charter:

Article 5

The income and property of the Institution shall be applied solely towards the promotion of the objects of the Institution and the exercise of its powers as defined in Article 7.

 

 

Article 7

The objects and purposes for which the Institution is hereby constituted are to promote the development of Mechanical Engineering and to facilitate the exchange of information and ideas thereon and for that purpose:

•(a) To encourage invention and research in matters connected with Mechanical Engineering and with this object to make grants of money or books or otherwise to assist such invention and research.

•(b) To hold meetings of the Institution for reading and discussing communications bearing upon Mechanical Engineering or the application thereof or upon subjects relating thereto.

•(c) To print publish and distribute the proceedings or reports of the Institution or any papers communications works or treatises on Mechanical Engineering or its application or subjects connected therewith.

•(d) To co-operate with Universities, other Educational Institutions and public Educational Authorities for the furtherance of Education in Engineering Science or Practice.

•(e) To provide indemnity insurance to cover the liability of the members of the Trustee Board ….

•(f) To do all other things incidental or conducive to the attainment of the above objects or any of them

 

As a senior Trustee with knowledge and experience of the rules of governance of the Institution, as determined by our Charter and By-laws, the President Elect has a duty to ensure that any investments made by the Institution are assessed against the requirements of the Charter and are monitored for risk.  The serious failure within the portfolio of PEP companies demonstrates a breakdown in this process for which the President Elect must carry responsibility

 

 

Safeguard the good name and values of the Institution

 

The financial losses associated with the acquisition and subsequent closure (liquidation) of the recently acquired training company, Amber Train, are covered elsewhere in this document but the damage to the reputation of our Institution is even more concerning.  The Times Educational Supplement of Dec 2017 published a damning article in which they highlight the plight of a number of apprentices left stranded with incomplete certified training by the liquidation of Amber Train.  Subsequent to the liquidation of Amber Train in July 2017, no provision has been made by the Institution to arrange for completion of their courses and both the Institution and the Chief Executive are strongly condemned in this article for this behavior.

 

Once again, the role and responsibility of the President Elect, as one of the seniors Trustees, is to guard against the possibility of such an occurrence with its attendant damage to our reputation and standing as a professional body.  In this he has clearly failed.

 

 

Financial stability of the Institution

 

The financial journey and current financial state of the Institution is well covered in the earlier sections of this document.  Needless to say, the substantial annual operational losses recently incurred make for very unhappy reading.  With the financial fallout from Amber Train still not finalised, by any measure the current financial position of the Institution cannot be described as “stable” as has been publicly claimed by those responsible.

 

Yet again, the role and responsibility of the President Elect, as one of the senior Trustees, is to work with his fellow Trustees and Council to ensure the Institution avoids following any paths which might have such catastrophic impacts on our financial stability.  On this count he has clearly failed.

 

 

 

 

Other factors

 

Recent events surrounding our President, Carolyn Griffiths, have led to her being put into a position in which she is curtailed from carrying out any of her normal trustee duties. Thereby she has been prevented from pursuing any steps or measures to correct the financial and policy failings in the Institution through her role as Chairman of the Trustee Board.  Indeed, we understand that it was at the time that our President tried to engage with the Trustee Board to make known her concerns about the current state of our financial affairs that her position was contested.

 

The President Elect has been directly instrumental in forcing the President into this untenable position; he led the Trustees to take the unprecedented step of standing the President down from trustee duties;  he allowed communication to go out to all members on behalf of the Trustees relating to this issue without any consultation with the President on the content of the communication; he has allowed a long and expensive process of external investigation into the issue to take place without providing any written details to the President on what the QC had been asked to investigate.  In addition, we understand  that he has failed to offer on behalf of the Institution any legal advice to the President and completely failed to support her in any other way.

 

Finally, at the Past Presidents lunch on 21 February 2018, the President Elect took it upon himself to inform the Past Presidents that if they wished to raise any issues with the Trustees they should communicate now only through himself and not the President!

 

The Institution’s Code of Conduct Regulations state:

CR12.  Members shall be alert to the ways in which their duties derive from and effect the work of other people; respect the rights and reputations of others and shall:

          CR12.1   use their leadership and management skills responsibly.

 CR12.2   not recklessly or maliciously injure or attempt to injure whether directly or indirectly the reputation, practice,     employment or livelihood of another person.

 

 

 

By any reasonable measure, the President Elect has failed in his duties

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