Sean Tompkins, the chief executive of the Royal Institution of Chartered Surveyors (RICS), is facing the biggest governance crisis of his 11-year reign.
The 152-year-old institution has been in turmoil since allegations in the Sunday Times late last year that four directors were dismissed in 2019 for raising the alarm over a 2018 BDO financial report. The story sparked a governance crisis and then a full-blown existential one as members clamoured to voice wider concerns about how RICS is run and the people who run it.
At the end of January, RICS bowed to industry pressure and announced plans for two reviews, one of which is being overseen by independent QC Peter Oldham, who is investigating the events that led to the dismissal of four non-executive directors. The other review is a broader probe into the “purpose and relevance of RICS in 2021 and beyond”, with RICS officially kicking off a global consultation last week.
Now, in an exclusive interview with Property Week over Microsoft Teams from the loft of his home near Barnet, North London, Tompkins responds to members’ concerns, ranging from the independence of the broad review to issues such as fees, bonuses and international expansion.
ON THE REVIEW’S INDEPENDENCE:
How has the consultation gone so far?
Firstly, I want to be absolutely clear that it’s a great time to be re-looking at many things. I can’t imagine that there is any organisation that, having gone through the last 12 months, isn’t needing to ask itself some questions for the future.
We’ve started to get good engagement through all of the various means. We’re trying to reach out to 134,000 people in 100 or more countries with 100 different specialisms. That’s the extent of the voice of this profession - it’s huge, it’s vast, it’s massively diverse and we need to hear from all of that voice in order to think through in a post-Covid environment what are the big priorities for the profession going forward.
It’s important we hear from the broad diversity of what their thoughts are
We’ve got good engagement so far coming through the structured areas - areas that are critical, but we are in the early stages. We’ve got an email inbox if anyone wants to tell us anything. We’ve got a survey going out to the whole profession and many roundtables, so we’re trying to find all the avenues of all the channels that will make 134,000 people believe there is a place for them to suitably bring their voice to the table. It’s very early days but I’m hoping for a huge response from the profession, because I think it’s important that we hear from the broad depth and diversity of what their thoughts are. Ultimately, the governing council will need to look at the strategy and priorities and that will be heavily influenced by the voice of the profession.
There are concerns over the independence of a review that is being overseen by yourself and president Kathleen Fontana. What is your response to that?
I think you’ve got to look at that in the perspective of what is actually happening. Kath and I are helping to project to the profession that their voices can be heard. We’re taking to social media and having conversations with people like you to encourage the profession to use its voice. That’s a pretty reasonable role for the chief executive and the president to be doing. Ultimately, this profession has a governing body, and that governing body will see all the feedback, all the views, and it will be the governing body’s decision in terms of any changes it wishes to make and any revised priorities it wishes to bring about. Like for many professional bodies, that elected governing council is the decision-making voice, and that’s the critical component for the profession.
What Kath and I are doing is trying to get as many people to express their views as we possibly can so that the governing council is hearing the broadest opinion. We have three-year business plans and you’re really projecting in the post-Covid world what that is going to look like. You’ve got to make sure you get a breadth of voice into that because you’re going to be making some potentially big fundamental decisions for the future of the profession.
Some have called for an independent party to oversee the broader review. Why did you decide against that?
Professional bodies are pretty complex. You’ve got to understand them and you’ve got to understand all the issues. I think the profession in every period elects a trusted group of people as its governing council. The profession needs to place trust in the people it has elected to develop the strategy and priorities based on the voices that are heard.
Those people are in elected positions. They’re put there by the profession to do this job, so I think it is important to let the governing council do their job and ultimately, if the profession doesn’t think the governing body is doing the right job, I’m sure every time there is an election that will be made well-known, like in any situation.
It’s a very diverse governing council and I really believe it has the ability to understand the vast array of voices and thoughts from everybody, from those who are just about to start in the profession to people who are much later in life in the profession. Across the whole of land, real estate, and construction, it’s a massive voice and they are elected and equipped to do that.
ON OVERSEAS EXPANSION:
What do you say to members concerned about RICS’ overseas drive?
That’s been a strategy that the profession voted for back in 1999, so it set out on a path of wanting to internationalise and it has been successful in building up the international profession. That’s the strategy the organisation has pursued. It’s a strategy that has been going for many many years.
I’d say a couple of things: What is important here for the future is this - every profession that I can think of is needs to ensure that it is relevant with very new challenges in the 21st century - everything in this profession from rapid urbanisation, population growth, issues of climate, ESG, data, digital - everything. I think maintaining a trusted profession, working to high standards with a voice on major international issues, is significant to being relevant. If you think about the internationalisation, 40% of the people becoming chartered surveyors are outside the UK, but many of them work for organisations that we know in the UK as well.
I think maintaining a trusted profession is significant to being relevant
The global flow of money doesn’t really work in the same way as we think about borders, and I think we need to be very relevant with how money flows around the world and the major issues that the world faces.
One of the biggest aspirations we have among young people is that they do want to feel that they are in a profession which is mobile globally, so there are lots of issues here, and I realise that even in 1999 when I look back, there were people who didn’t like the fact that the RICS chose to internationalise, but it did. Equally, there are generations coming through who value the fact that their professional recognition is one that has international respect.
If you get an overwhelming response from UK members that they are concerned about the expansion into places like India, how would you take that on board?
You’ve got to understand what the concerns are and to relay back to people, if that’s what is required, what the strategic rationale is of continuing to do that or not.
It’s only right that people say they’ve got real concerns over X or Y, and therefore the council needs to listen to those concerns and respond. That’s only right in a review situation, so I suspect there will be many challenges of ‘we think this or we’re concerned about that’, and that’s got to be part of the strategic response, but equally the RICS has got to look at the realities of the world and the fact that actually as we sit here today, we have thousands and thousands of chartered surveyors outside the UK.
If you look at our existing base of our profession, over a third are outside the UK, and over 40% of new trainees are outside the UK. It’s a bit difficult to have a UK/non-UK debate now, but I think there is a clear need to think about where you focus and what you prioritise.
The important thing for those in the UK is that if people feel that that is denying for them the focus of the RICS in the UK, that’s something we have to put right.
What do you say to people feeling they pay more and more for less and less?
The fees are to be able to deliver the services and priorities that the governing council approves as part of the business plan. Ultimately, you can’t on one hand talk about fees and price without talking about what you’re going to do. The important consideration in all of this is whenever you look at the future strategy, that has to be priced, and ultimately, that is the cost. Clearly within that, if you start to reduce things because you think they’re not valuable or not needed, I’m sure there will be people at the end of the day saying you should be doing this or that, so you can’t really have a price discussion outside of what the strategies and priorities really are.
If the government keeps asking RICS for its views, that is great for the profession
All these things need to be balanced and they are balanced.
We don’t seek as an organisation to make profits that we distribute to shareholders or anything like that. We run the organisation so that any of the profits go back to financing the purpose of the organisation. It’s a mutual entity in that respect. The price is very relevant to decide ultimately what you want the strategy to be.
Given your work in areas such as cladding and sustainability, do you think that some issues are being underappreciated as a result of the governance crisis?
Look, I think clearly all the issues about the independent review have created a lightning rod of some views and opinions. That’s reality, you know. But I think it’s important we understand all views and opinions because you’ve got to make decisions on everything you’ve got.
Professions continue to need to demonstrate their relevance in the 21st century. You’ve got to maintain trust, which means you need to be focused on standards, ethics and how you regulate those. You need to be focused on making sure you have a voice on major issues - and that voice is one for professions that comes with a feeling of independence and in the public interest. You’re not doing that because you’ve got a self-interested conclusion in the answer - you’re doing that because as a profession you are being trusted to balance all of the issues.
Cladding is a brilliant example of how professions need to balance significant issues and arrive at an answer that is the right thing in the public interest.
It’s important that we value the fact that there is a voice here that is balancing so many different issues and advising regulators, governments and so on.
We undertake activities for governments, we undertake activities for regulators like the FCA, and they’re really important stakeholders to maintain trust in. They’re critical to the relevance of professions because if the government keeps asking the RICS for its views and opinions, that is great for the profession.
Have RICS executives been receiving bonuses while furlouging staff?
It’s a little bit more complicated than comes over. Firstly, it’s important to understand that I don’t set my own remuneration. My objectives are set at the start of the year and there are reward systems built around achieving those objectives, as is normal in most organisations. This year, because of all the challenges, myself and many of our senior executive team took pay cuts because we need to support the challenges the organisation was facing.
On bonuses, our remuneration committee decided not to trigger the bonus scheme, with the environment and furlough and so on, but they did pay some discretionary award to the highest performers. That’s not the same as triggering the bonus scheme.
They made a decision given everything going on that it was not appropriate to trigger the bonus scheme as it would normally be triggered, but they did give discretionary bonuses to the highest performing employees. At the end of the day, we protected the majority of our staff from any need of any pay cut or anything else. The senior people took pay cuts. Equally there is a balance here of incentivising people who are still delivering performance. It’s a difficult one. The remuneration committee is chaired by an independent [person], it has members of the profession on it, it has an independent adviser, and they have to balance this incredibly difficult set of balances and they arrived at conclusions this year on the basis of that.
And in terms of accepting furlough money?
In all of our thinking and planning, if we were in a position to be able to start to repay furlough money we would.
How would you describe RICS’ financial position?
Stable. Stable but like everybody else, we’re still trying to work out what the new normal looks like. From our perspective, we’ve had to make some changes like any organisation. In a normal financial year, we would have run over 2,000 events and conferences globally. We’ve run zero. We would have been involved in doing in-house training and we haven’t done any of that. Our members have struggled and there are people in our profession who have asked us for significant concessions on their subscriptions because they’re either unemployed or their income has been severely affected. All of these things have hit the realities of our normal financial position and we’ve made changes to the organisation, embracing digital, which was a big part of all of our findings when we looked at the future of the progression.
If we were in a position to be able to start to repay furlough money, we would
Right here, right now, we’ve made those changes and we believe they’ll provide us with the foundations of stability in a post-Covid environment, but like everyone else, there is no certainty here.
I’m looking almost daily at what is happening, what decisions are being made in different parts of the world and getting to a position where RICS has absolutely come through the big challenges of Covid and is sustainable financially for the future, and that’s what I need to deliver.
How have you managed the day-to-day running on the business?
As a CEO, you really always want to feel the pulse of the organisation, so yes we’ve replicated what we would do just like what we’re doing here now [over Teams]. We have regular global town halls and weekly communications, but any CEO will tell you it’s important to feel the pulse of an organisation as well. In the short term, because of the investments we made in previous financial years, we’ve been able to move rapidly digitally, including not letting candidates down on their APC assessments, by being able to embrace new ways of working. I’m pleased that we invested in technology because it’s enabled us to do a lot more things, but as a CEO, you want to feel the pulse of your organisation and you do want to see people and help them with their roles and stakeholders. That’s impossible to replicate at the moment.
ON THE LEGALS:
Several senior figures say they’ve faced legal threats or fear receiving legal threats for criticising RICS. Why have you taken that approach?
I don’t know the precise details of that. I’d need to know the details. It’s not something I’m involved in as CEO.
Looking back at your 11 years at the top, what do you think your legacy will be?
You’re assuming I’m going. Do you know something I don’t? I make no bones about it, I was brought in to help globalise the profession. That’s what I was recruited to do. I know some people don’t agree with that but that’s what I was asked to come and do and I’m very pleased about how globally respected this profession is and how connected it is to some of the critical instruments of the globe.
I’m very proud of the advances we’ve made on diversity and inclusion. Between 1868 and 2014, we never had a female president. We’ve had three female presidents in the last six years. I’m proud we’ve been able to encourage and create the environment where people have been willing to put themselves forward and take on a leadership role. I’m proud 11% of our apprentices are now from the BAME community - I wouldn’t have been having any of those conversations 11 years ago.
If I can ever see an opportunity for this profession to raise its status and voice, it’s now
I’m also proud that in a crisis year we had one of the biggest growths in the new trainees to this profession. We had 8,000 trainees and apprentices join even in a year of crisis - I’m talking a pandemic. I’m proud the future generations are still wanting to be part of a profession that they would value and they would see status in.
The final point is that I’m proud that this organisation, unlike many professions that have been split up from their ability to set standards and regulate, is still trusted as a professional body to set its own standards and to regulate in the public interest. As a result of that, we’re always asked for our views on significant public interest issues and I think that’s an incredible place to still be. The fact that the UK government has worked tirelessly with us to find solutions to a massive market issue around cladding - that tells me of the trust and respect that this profession and that RICS has, and we need to do everything we can to maintain that because that is what make professions relevant.
How is your relationship with the current government?
Clearly, they’re challenged on every angle you can think of. Things are becoming a lot more difficult to find solutions to. The one thing I’d say in the 11 years as chief executive is that problems are becoming more complex and they really require significant thinking. What I have found particularly in this last year is that the government has embraced lots of different views on how you might be able to bring about solutions to some challenging and complex issues. I’ve felt all the way through that our views have been sought and welcomed. I was proud when Robert Jenrick said he was really grateful to RICS for the incredibly complex work it has done to come up with some revised planning guidance.
ON EVENTUAL FREEDOM:
When lockdown ends, what’s the first thing you’ll do?
Get out of the loft!
ON THE FUTURE:
Is there any other message you’d like to get across to members?
The one thing I’d really like to get across - and this isn’t to take away from any of the views being expressed - is that this profession really has an incredible opportunity to maintain its relevance, profile and status in the world. If you think of all the things that are happening - who else is going to be able to provide the right advice and voice when the built and natural environment is in need of getting the best thinkers it can get?
If you take population expansion, pressure on cities, pressure on natural resources such as water, energy and food supply, where climate change is a serious issue, where ESG is going to be a lens that people will look through for projects and investments, where diversity and inclusion is critical to bring in new thinking, this profession has to be at the absolutely epicentre of being able to think through all the issues that will be relevant to housing, that will be relevant to infrastructure and will be relevant to the way that nations, new or old, rebuild themselves after a pandemic.
This profession and RICS still have the trust and confidence to provide the thinking and the voice. If I can ever see an opportunity for this profession to raise its status and voice, it’s now.