Annual Review and Remuneration Report
Our performance and achievements in the past year
To modernise our governance and ensure the profession is equipped for the future, your elected Governing Council have proposed a series of changes to the RICS Bye-Laws. Governing Council has put forward a two-stage approach for introducing and implementing these changes.
The first stage culminated in November 2018, when the profession voted on a Special Resolution put forward by Governing Council to establish a modernised, future-facing governance structure fit for a 21st century professional body. The changes were proposed to put in place high-level governance fit for an agile 21st century profession and ensure the profession remains trusted to set and enforce our own professional standards. Voter turnout was 11%, with 86% voting in favour.
The vote was an important step forward for the organisation as it allows RICS to be appropriately structured to continue building a global professional body ready to equip the profession for the opportunities ahead. This will enable RICS to meet the changing expectations of stakeholders, clients and the wider public.
Over the course of 2019, we will work to:
As a result of these reforms, RICS members can expect to benefit from agile decision making over the future direction of RICS and how we best lead and support the profession. We believe these reforms help improve our effectiveness and our impact and, therefore, secure our future as a self-regulating profession, trusted to set and enforce standards to the benefit of the public good.
Governing Council is now moving forward to advance plans for the second stage of governance reforms involving a detailed Bye-Law review. This second vote will build on the first vote related to the high-level governance structure and enable us to streamline and modernise our constitution which has not been updated for several years. Council will bring forward a wider package of reforms to underpin the high-level structure approved in the first vote.
We initially anticipated a vote on a second stage of governance reforms to be progressed in late 2019. We continue to work on the specifics of what this will include and the revised timescales and will communicate this to the profession. Our focus for the rest of 2019 is the successful implementation of the stage one reforms.
All organisations need to keep pace with external expectations and stay up to date in terms of governance and these proposals are intended to modernise the Institution ensuring it – and the profession – remain respected and up to date and effective. Perhaps the most important benefit for members of the profession is the prospect of remaining a self-regulating profession, trusted to set and enforce its own standards rather than regulated under statute as many professions already are.
Governing Council believes that the best way to serve members’ interests is to ensure that the profession is trusted and relevant. Council believes this will be best achieved through building a modern, diverse and agile Governing Council and an appropriate oversight body for the setting and supervision of regulations and standards. Council believes the proposals will ensure trust and ongoing demand for the profession into the future. They will also provide for greater agility in decision making and responding to the rapid pace of external change. Regional Boards will continue to focus on supporting and promoting the profession in our regions.
These changes will not have an impact on member fees. The purpose of the proposed changes are to put in place a governance structure fit for a 21st century professional body and our aim is to continually modernise and make the Institution more efficient.
In November 2018, the profession voted on a Special Resolution to amend the RCIS Royal Charter and Bye-Laws to establish a modernised, future facing governance fit for a 21st century professional body. Voter turnout was 11%, with 86% voting in favour.
The proposed changes to the Royal Charter and Bye-Laws have been sent to the Privy Council for formal approval. Once Privy Council grants formal approval, the changes will be incorporated into an updated version of the Royal Charter and Bye-Laws and these changes will be implemented throughout 2019.
Additionally, Governing Council are moving forward to advance plans for the second phase of governance reforms and will ensure that the profession is kept informed as the plans advance.
The Special Resolution that the profession voted in favour of in November 2018 only covered the highest-level governance of the Institution — the governance bodies that are most visible to our external stakeholders.
A second vote would build logically on the first vote related to the high-level governance structure and enable us to streamline and modernise our constitution which has not been updated for many years. The aim of phase two is to bring forward a wider package of reforms that support the modernised high-level governance structure.
Governing Council are moving forward to advance plans for the second phase of governance reforms and will ensure that the profession is kept informed as the plans advance.
Governing Council, even in its current form, is not a direct representative body. Members are elected to provide strategic leadership and oversight, bringing perspectives from their part of the profession. We could never create a functioning Governing Council representing all the geographies and specialisms but we can ensure that Council is equipped to make sure the profession remains relevant, trusted and valued in the 21st century – that is the purpose of these reforms.
No. The changes have been devised and proposed by Governing Council, the profession’s elected leadership body. Council has discussed and carefully considered these issues over a substantial period. Governing Council will remain, on behalf of the profession and wider stakeholders, the strategic leadership and oversight body working in partnership with the staff team to achieve the profession’s aims and ensure it stays relevant, trusted and valued.
Council believes that the current approach in which the President chairs Council for one year while in office does not provide the consistency and strategic long-term thinking needed to drive forward the profession. RICS is now a complex global body of considerable size and importance to its stakeholders (clients of the profession, governments etc) and as such needs a chair of longer tenure to lead Council in ensuring a future for the profession.
The President will remain the lead ambassador and public face for the profession. He or she will lead the programme of engagement with the profession and stakeholders, building the profession’s future and promoting the benefits of Chartered Surveyors.
The Chair of Governing Council will:
Council has decided that the Chair could be, but does not have to be, a member of the profession. If these changes are approved, applications for the role will be invited from members of the profession and those who are not members of the profession.
The best person for the role will be selected through RICS’ appointments model. This will be an open, fair and transparent process in accordance with good practise appointment processes.
The proposal is that there will be 25 elected seats on Council. This includes 15 elected regional seats: two for UK; two for mainland Europe; one for Middle East; one for Sub-Saharan Africa; two for China and Hong Kong; one for India; one for South East Asia; one for Australasia; three for Canada and USA; and one for Brazil. There are also six elected strategy seats which are based on professional specialisms and 4 office holder seats elected by Council – the President, the President Elect, the Senior Vice President and the Chair of Governing Council.
The changes proposed by Governing Council are designed to bring perspectives from across a range of regions and professional disciplines, with a broad split of seats that reflects the current and anticipated future distribution of the profession. Although there are only two seats for the UK, in practice members from the UK will hold at least eight of the seats for the foreseeable future as two current office holder and four current strategy seats are already held by members from the UK. Council took account of this this when it decided on the base seat allocation.
An important consequence of the proposed role of a smaller Council – to act as a long-term strategy body for the future of the profession - is that the World Regional Boards, would take a more prominent role in supporting and promoting the profession and setting the strategy for their regions.
The proposed single Board for Standards and Regulation, if approved, will cover all aspects of policy relating to qualifying, practice standards and enforcement. It will NOT however cover disciplinary case handling – that is a matter (as now) for disciplinary panels which are at arm’s length to the Regulatory Board and the rest of RICS.
Council believes that bringing together our approach to setting standards and how they can best be enforced is the best way to ensure that we remain trusted to set and enforce the profession’s standards. There is also a benefit for the profession, in that a single board will have an overview of the total expectations and requirements placed on the profession by RICS – under the current separate standards and regulation regimes, there is a risk of a fragmented and burdensome approach.