The Chartered Insurance Institute (CII) is taking over the Personal Finance Society (PFS) board immediately, citing “serious and significant” governance failures.
The CII Group board told the PFS board that it intends to appoint a majority of directors to the PFS board and appoint three institute directors to the PFS board with immediate effect – a move past PFS presidents have dubbed “cynical”.
The move appears to have scuppered an apparent agreement made announced by the two bodies in September which signalled an end to the long-running dispute between the bodies.
It began last year after the CII failed to de-register the PFS as an independent body and take it under full control along with the four other societies the CII already fully funds and operates.
According to the CII, today’s actions follow work it had been carrying out to resolve “complex and historic” financial issues. It added this was not an outcome the CII Group board wanted or pursued.
The CII added that its team had worked hard for many months, initiating independent mediation, and responding to the PFS board’s demands “diligently, professionally and with immense goodwill”.
Consequently it said it was “deeply disappointing” that independent mediation has failed, and “serious and significant governance” failures have arisen, which left the CII Group board with “no alternative but to take this action at this juncture and resolve matters without further delay”.
Board members appointed
The PFS is a subsidiary of the CII Group, and the PFS’ articles of association give the CII Group board the right to equalise and/or appoint a majority of directors to the PFS board.
The PFS board is currently made up of five PFS member directors and two institute directors. The CII said it is appointing three further institute directors, who together will equalise the PFS Board with immediate effect.
The CII added that to guarantee the highest standards of governance and in accordance with the PFS’ articles of association, after a 30-day consultation period, it intends to form a majority by appointing a further institute director to the PFS board.
The three announced new PFS board institute directors are:
- Sarah Howe, former CEO of Harpenden Building Society, former independent chairwoman of the Consumer Panel at Openwork, and recently appointed to St Clare Hospice board.
- Neil Watts, former board member of the Office of the Qualifications and Examinations Regulator (Ofqual), former board member of the Architects’ Registration Board (ARB) and former advisory board member for Cifas, as well as former complaints committee member at the Independent Press Standards Organisation (IPSO).
- Azlina Bulmer, former director of international at the Royal Institute of British Architects (RIBA), current associate non-executive director at Harrogate and District NHS Foundation Trust, and existing CII membership and engagement director.
The CII noted there is no change to any services received by PFS members, adding the CII Group will continue to provide and maintain all PFS member services.
All PFS qualifications, exams, certificates, training, events, and the statements of professional standing, as well as all operational functions, including marketing, HR and IT will continue as normal.
Helen Phillips, group chairwoman of the CII said: “This is not an outcome the CII Group board wanted or pursued. The CII team has worked hard for many months, initiating independent mediation, and responding to the PFS board’s demands diligently, professionally and with immense goodwill.
“Therefore, it is deeply disappointing that independent mediation has failed, and serious and significant governance failures have arisen, which leave the CII Group board with no alternative but to take this action at this juncture and resolve matters without further delay.
“The CII Group board remains deeply committed to its PFS members. The PFS is a critical part of what we do and an essential voice for advice.
“Now more than ever, it is important that all our time, energy and resources are fully invested in building a stronger future, and delivering exceptional services, for our PFS and CII members.”
Alan Vallance, CEO of the CII said: “Sarah, Neil and Azlina all bring immense professionalism and exceptional experience to the PFS board.
“The newly composed board will continue to be mandated to focus entirely on protecting and serving PFS interests.
“The CII team will work with the new PFS board to embed best practice and establish the long-term governance arrangements that will ensure PFS members receive all the services and support they deserve without any further delay.”
In a statement issued this afternoon, Sarah Lord, president of the Personal Finance Society until September of this year, called the CII’s move “deeply cynical”.
“The orchestration of the announcement that we have witnessed today shows that this is a pre-meditated decision,” Lord continued. “I have until very recently been in conversations with the CII leadership and we have engaged in mediation at their request. The conversations were still underway. It is extraordinary that they have been so disingenuous. Acting in this way today, and in such an aggressive way, is likely designed to diminish the existing PFS Board’s powers and undermine its forward-looking strategy.
“I will do all I can over the coming weeks to ensure the Personal Finance Society, its members and the professions interests are protected.”
Garry Hale, PFS president between 2012 and 2013, added that he was “shocked, stunned and angered” at the timing of the CII’s move and the “cynical” decision to announce its intention to ‘flood’ the PFS board with CII nominee directors.
“The timing of this on the eve of Christmas celebrations is a blatant attempt to avoid scrutiny, avoid CII/PFS member backlash, avoid journalists’ questions and prevent regulators and politicians from actively understanding or mediating the decision in the full knowledge that the majority of the members, sector journalists and regulators will be off work and with their families, in many cases for the first time in three years,” he added.
“I would urge all PFS members to speak out and raise any concerns they have about this potentially damaging move.”
Year-long dispute
In September, the Personal Finance Society (PFS) and Chartered Insurance Institute (CII) published a joint statement which appeared to bring to an end the year-long dispute between the bodies.
The organisations said they had reached “an agreement in principle on a range of matters” which would enable them to “move past” the controversial 12 months.
They added at the time they were still discussing the “finer points of the terms” with the aim to update members of both bodies in 2023.
The dispute began last year with a failed attempt by the CII to de-register the PFS as an independent body and take it under full control along with the four other societies the CII already fully funds and operates.
The contentious move prompted the resignation of long-time PFS CEO Keith Richards and the fallout has triggered a leadership overhaul at both organisations, along with an extended consultation period by the CII.
Sian Fisher stepped down as CEO of the CII after more than six years at the helm of the body earlier this year following the failed takeover and subsequent member consultation.
She was initially replaced by Jonathan Clark as interim CEO in January, with former CEO of the Royal Institute of British Architects (RIBA) Alan Vallance taking on the position permanently from 30 August.
In August the PFS appointed Don MacIntyre as interim CEO.
