An independent review into the Royal Institution of Chartered Surveyors (RICS) has found that four non-executives who raised concerns over an audit were wrongly dismissed.
The review from Alison Levitt QC has described a “power struggle” at the crisis-hit body in which four members of the management board were ousted and that “sound governance principles were not followed”.
The report found that the origins of what went wrong lay in the governance architecture of RICS.
Prior to the report’s publication, chief executive Sean Tompkins, president Kath Fontana, interim chair of Governing Council, Chris Brooke, and chair of the Management Board, Paul Marcuse have all stood down from their posts. Amit Shah, the chair of the audit committee, has come to the end of his term.
A process is under way to appoint a new interim chief executive, with an announcement expected imminently.
Nick Maclean, who led the steering group for the independent review, has been appointed temporary chair of Governing Council, and will be donating his salary for the role to Lionheart, the RICS charity.
Levitt concluded that a lack of clarity about the roles and responsibilities of the boards, the senior leadership and the management left cracks within which the chief executive and his chief operating officer had become used to operating with “little effective scrutiny”.
The 153-year-old institution has been engulfed in a governance crisis since The Sunday Times reported late last year that four non-executives had been dismissed in 2019 for raising the alarm over a 2018 BDO financial report.
Levitt has entirely exonerated the four non-executives dismissed from the board and says they would have failed RICS if they had backed down.
The BDO audit, which raised serious concerns about Treasury Management controls, was received by the chief operating officer in December 2018, but not shared with the Management Board until seven months later.
Governing Council was unaware of the report’s existence until it learned of the non-executives’ dismissal in November 2019 and was not shown it until January 2021.
Contrary to what was later claimed publicly, Governing Council was not “kept fully informed”.
Because the constitution and structure are the root cause of what went wrong in 2019, the report says there is a real risk that if it is not dealt with something similar could happen again.
The report’s main recommendation is for a wide-ranging external review of purpose, governance and strategy, led by an independent reviewer, such as a retired senior civil servant.