DRAFT
The English-Speaking Union Of the Commonwealth
MINUTES of the meeting of the Board of Governors held at Dartmouth House on Thursday 7th July 2011 at 11.00am. Attendees Dame Mary Richardson (Chairman), Paul Boateng, Julia Boyd, Saroj Chakravarty, Rod Chamberlain, Jon Dye, Alex Finnis, Richard Oldham, Colin McCorquodale, Alan Watson. In Attendance Steve Hodkinson, David Tilly (Geldards Solicitors), Peter Kyle (DG designate), Chris Margaritis. Christopher McLaren and Anthony Westnedge for item 6 only.
1. Welcome The Chairman welcomed members and wished Alex Finnis a speedy recovery after his recent illness. She also welcomed David Tilly (Geldards) for what she hoped would be the final time since over-reliance on legal advice was unnecessary, unhealthy and expensive. Mistakes had been made regarding governance, mistakes that could not be made again. She explained that she had held a meeting with ESU’s legal advisers in order to clarify the Bye-Laws. Errors regarding Board appointments had been identified and correcting these had changed the composition of the Board. For example, it had been clarified that an Honorary Officer has an ex-officio status as a member of the Board and that retirement from office means that ex-officio position ends. Also clarified was the regulation that service as a co-opted and elected governor count together towards the six year retirement rule. The Chairman reported that Christopher McLaren and Anthony Westnedge had been invited to make a presentation to the Board on the negotiations on Dartmouth House with the Red Carnation Group and this would be their final attendance at the Board. Dame Mary explained that the ESU faced a serious financial situation such that the Board would be asked to draw down from reserves in order to meet expenditure commitments over the coming months. Jon Dye had stepped in to work with the ESU finance team on the audit and preparation of the final report accounts for 2010-11. He would report on this at the P&R meeting. 1
The Board then agreed that the Director General designate, Peter Kyle, should join the meeting as an observer.
2. Apologies Apologies were received from Jenni Hibbert.
3. Declaration of Interests The Chairman reminded members that they should complete the Declaration of Interest pro-forma and return it duly signed and dated to the ESU office.
4. Minutes of the Meeting held on 17 March 2011 The Board agreed to refer consideration of the minutes to the meeting to be held on 21st July 2011.
5. Appointment of Secretary (Bye-Law 46) The Board approved the interview panel recommendation that Professor Steve Hodkinson be appointed Secretary ESU. (Steve Hodkinson then joined the meeting.)
6. Dartmouth House Negotiations 6.1 Lord Boateng reported on a meeting that he, the Chairman and the Director General designate had held with Jonathan and Oliver Raggett of the Red Carnation Group (RCG). At that meeting the Chairman clarified that
The purpose of the meeting with the RCG was not to negotiate but to inform them of the election of a new ESU Chairman, that the principal members of the ESU negotiations group had stood down as governors and to clarify aspects of the draft Heads of Terms letter that had been made available to her in the past few days. Given the changes within ESU, if the negotiations were to continue a new team would need to be appointed. As the offer stood it was not likely to be acceptable to the Board of Governors and the membership in general.
For their part the RCG representatives indicated their surprise at these developments. They had understood that ESU was ready to sign the Heads of Terms agreement and reiterated that ESU had approached them in the first place rather than vice versa. They indicated that the draft Heads of Terms represented their final offer. Board discussion followed after which it was agreed that
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The ESU negotiations group would be stood down and thanked for its work. The RCG offer would remain on the table whilst the Board carried an options appraisal that would consider other ways forward including the status quo on the use of Dartmouth House. Such a due diligence exercise would ensure that the Board was discharging its duty to seek best value in the interests of its charitable objects. Proceeding without a full appraisal of all possibilities would be a breach of their duty to the charity. Aspects of the options appraisal would be carried out by Board member Rod Chamberlain who had been a member of the negotiations group.
6.2 Christopher McLaren and Anthony Westnedge were then invited to join the meeting and the Chairman thanked them not only for the time and effort they had put into the negotiations but also for their many years of dedicated service in various capacities to ESU. In opening his presentation to the Board Christopher McLaren express his surprise at the turn of events. He referred to previous meetings of the Board at which there had been almost unanimous support for proceeding to an agreement with RCG. Since then, he explained, the offer had improved substantially in regard to a members’ room in Dartmouth House, access to hotel services at a discounted rate, additional office space for ESU staff, protection for ESU in relation to employer liabilities resulting from the proposed changes, and a substantial contribution to ESU’s dislocation costs during the restoration work. He argued that the offer was the best that could be achieved and was the only offer on the table. It came with the unanimous recommendation of the negotiations group and if it was rejected by the Board he believed that it would be withdrawn completely. In his view other options would prove to be impossible because of the impediments in the current leases held by RCG which included a ‘first option’ clause in relation to the property. In conclusion he said that if it was possible to negotiate a better deal that would be excellent but that the Board should remember its duty to the charity and its objects. 6.3 Board members sought clarification from Christopher McLaren and Anthony Westnedge on a number of matters: -
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the precise spaces that would be exclusive to ESU and their suitability; the method for determining the ‘free’ or ‘paid’ status of rooms needed by ESU for its charitable and other events, its governance meetings and the hire rates since the costs to ESU of this arrangement needed to be know in order to judge the value to ESU of the offer; the length of time the restoration works would take and arrangements for members and staff during that time; whether or not RCG’s contribution to ESU’s temporary displacement costs would be sufficient to meet the need; the extent to which the proposed arrangements would ensure that ESU’s presence in Dartmouth House would be commensurate with the role of DH as the
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international HQ of ESU. Of particular concern (in addition to rooms for ESU activities)was how the need for an ESU reception in the main vestibule and for direct access through the main entrance and across the courtyard into Mews House would be met; the whereabouts of and obligations on ESU of the current two leases; the terms on which Cushman and Wakefield had been engaged.
In discussion members of the negotiations group emphasised that finance is needed to carry out necessary restoration work on Dartmouth House in order to ensure that its events facilities are modernised and competitive in the events market and to have fit for purpose office accommodation. The group also stated that NCEW is in favour of a covered Mews courtyard, something that would require RCG’s agreement for it to happen. Christopher McLaren said that there would be an ESU reception desk in the foyer of Dartmouth House but the question of room use and pricing policy had been left to the lease negotiating stage. He believed that the shorter of the two leases for the three floors above Dartmouth House had 14 years to run but did not know where the leases were held. Cushman and Wakefield’s terms of engagement would be in an agreement held by Jill Lloyd but whilst the terms include a ‘no win no fee’ clause they were unexceptional for this kind of work but considerable additional work had been undertaken. The Chairman thanked Christopher McLaren, Anthony Westnedge and other members of the group for their contribution to the group which would now be closed down having completed its work. 6.4 Christopher McLaren, as the retiring Hon Treasurer, was then asked about the circumstances in which legacy income held by Board agreement as capital had been drawn down to meet current expenditures. In response he said that he agreed that the principle of holding legacy income as capital is sensible and one that he supports and one that was previously required by the Board. However, provided the legacy concerned had no restrictions on its use, then there could be occasions when it might be drawn down. On this occasion he had not authorised this to happen. Christopher McLaren and Anthony Westnedge then left the meeting. 6.5 Members of the Board expressed the view that the presentation had not allayed their misgivings about the RCG offer and felt that as presented it did not appear to meet the needs of ESU and its members. After discussion on the next steps to be taken it was agreed to
Continue discussions with RCG about the offer they have made but carry out a thorough analysis of the draft Heads of Terms to determine the true value of the offer, especially since there were key differences between the draft terms and the letter the Chairman had received from RCG after her meeting with them. Establish the costs of refurbishing the Mews House in order to judge the value of the proposed RCG contribution towards this work.
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Locate the RCG leases in order accurately to establish the terms of those leases and any clauses that might be a constraint on other options. Authorise the Chairman to establish an Options Appraisal Working Group as soon as possible and to meet the costs of this work. Consult with the NCEW at its meeting on 21st July on the nature of the offer on the table and the extent to which it meets their needs.
7. Elections 7.1 Members agreed to reinstate to membership of the Union and the Board to those members of the Board (one case being more serious than the others) who for one reason or another had been arrears with membership fees for more than 3 months (Bye-Law 9) and had therefore ceased to be members of the Union. 7.2 The Secretary asked the Board to note that the appointment of co-opted members is a matter for the Board and not for members of the Union in general meeting other than when co-opted members come up for rotation or complete six years of continuous service as a co-opted and/or elected member. Co-opted members of the Board have full rights as governors. The motion put to the 2010 AGM for the election of co-opted members should not have been on the agenda. 7.3 The Secretary reported that all members of the Board had been given 14 days notice of a secret ballot to fill casual vacancies for Hon Officers and elected members of the Board. The election would be held at the Board meeting on 21st July. Biographies of all nominations would be included in the papers for that meeting. The casual vacancies had arisen from resignations occurring during the current ESU reporting year: -two casual vacancies for Deputy Chairman arising from the resignation of Edward Gould and the election of Dame Mary Richardson as Chairman of ESU; -one casual vacancy for Hon Treasurer arising from the retirement from office of Christopher McLaren; -two casual vacancies for members of the Board arising from the resignations of David Carter and Elizabeth Hallam-Smith. The Secretary reported that it was likely that the number of casual vacancies for elected members of the Board would increase to four before the election was held. Those elected by the Board would serve until the 2011 AGM when they would be required to be proposed for re-election (Bye-Law 37).
8. Appointment of Ambassadors This item was deferred to the next meeting.
9. Chair’s Items 5
a) The Board agreed to appoint Lord Watson as chair of the group to Review the Royal Charter and Bye-Laws and for Julia Boyd to be member of the group.
10. Date of Next Meeting The next meeting will be held on 21st July 2011 at 5.00pm.
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