/chairmansletter

18 February 2011 Dear member Since I last wrote to you in November last year, a great deal of attention has been given to the issues arising from the Annual General Meeting (AGM) and I am now writing to keep you informed of progress in relation to these matters and generally.

Consultation with members The Board of Governors have been working closely with Richard Oldham and, through him, the NCEW, to implement the consultation process with members which has been agreed in discussions with Richard and the NCEW. This has been a time consuming process and I am extremely grateful to Richard, his colleagues within NCEW and to all members who have taken part. I understand from Richard that the consultation process is now well under way and the Board are waiting to receive the recommendations and proposals from Richard and the NCEW. These will be considered carefully by Governors and I anticipate that, following these meetings, the Board will be making specific proposals to the membership in response to their views and recommendations and that these can then be considered by the full membership at an extraordinary general meeting (EGM) referred to below.

Dartmouth House Although the Board is bound by duties of commercial confidentiality in relation to certain matters regarding Dartmouth House (in particular information regarding the discussions with RCG), representatives of the Board have met with representatives of the NCEW to share detailed information.

Dartmouth House and the Chesterfield Hotel are the most significant source of income for the ESU and of vital importance in enabling the ESU to pursue its charitable objectives. The Board has a clear duty to make the best use of the charity’s assets in the pursuit of these objectives but also recognises the great importance attaching to Dartmouth House as the worldwide headquarters of the ESU and as a “home” for members. The building is, nonetheless, expensive to maintain and the Governors have to have regard for maintaining its fabric and value for both immediate revenue and for the future. It is essential that a way forward is identified which allows the Board to discharge its duties whilst having due regard to the expressed wishes of the members who themselves play such an important role in the achievement of ESU’s charitable purposes.

I am confident that we will be able to achieve this and would like to express my particular thanks to Richard Oldham, Alan Cox and Peter Jennings, as well as to Christopher McLaren, Anthony Westnedge and Rod Chamberlain, who have together given valuable time to our discussions regarding Dartmouth House. It remains the Board’s intention to be able to report to members, with recommendations, at the forthcoming EGM. New Chairman As you know, I intend to stand down as your Chairman in April. The Board has strongly endorsed an open and inclusive process for electing my successor. I have

invited Governors who may wish to put themselves forward to express their interest to me and, at the same time, have asked Richard Oldham to consult with regional and branch chairmen to assess the views of the wider membership.

The ESU’s bye-laws provide that the election of Chairman is to be by the members with candidates for election being nominated either by the Board or by two members. If any members wish to exercise their right, under the bye-laws, to nominate a candidate for election as Chairman then a formal nomination should be made in writing to the Secretary of the ESU to be received at Dartmouth House no later than 31 March 2011 and, ideally, by no later than Tuesday 15 March, since this will enable all candidates to be considered at the Board of Governors meeting on 17 March and for the information to be notified to members in time for the EGM. At that meeting, the Board will consider those candidates who are eligible for appointment as Chairman and, if appropriate, will make a recommendation (or recommendations) to the membership prior to the EGM. All members will have the opportunity to vote on the election of the next chairman.

Director-General As you may know, Mike Lake has taken a decision to leave the ESU and his appointments as Director-General and Secretary-General of the International Council. The Board are extremely grateful to Mike for taking on a complicated and contentious task and for delivering a review that raises key issues for the Board which are being addressed in consultation with members.

The process of searching for a successor to Mike is underway and is being managed by the Board. The Board’s expectation is that a new Director-General will be appointed following the election of a new Chairman, which will enable my successor to play a role in that appointment.

EGM It remains the Board’s intention, and I know is expected by members, that an EGM is convened, and we expect this to be held on 14th April. This date, and the necessary details, will be confirmed by formal notice convening the EGM which will be issued to all members.

So far as the Board is concerned, the EGM will be for the following purposes: (1) to elect a new Chairman; and (2) to report to members, with appropriate recommendations from the Board, on the outcome of the consultation with members regarding governance and Dartmouth House.

Thank you for your continued support for the ESU and for all the important charitable work that is undertaken by the ESU, its members and alumni around the world.

The Rt Hon The Lord Hunt of Wirral MBE PC Chairman