| Topic: | Misconduct / Conflicts of Interest | |
| Posted by: | John Cameron | |
| Date/Time: | 05/12/15 02:13:00 |
| I prepared a paper for the board in advance of the November meeting, as Chair of the Audit and Risk Committee. I also discussed, in a number of calls the issue of conflicts with Russell Cooke, and my insistence that the board need to receive legal advice prior to the board meeting. The advice was required to protect trustees from falling foul of misconduct and mismanagement of the charity. Given the shambles of Putney Hospital, and the misconduct of the trustees, a reader may understand my concern. The legal advice was not taken, due to the efforts of Simon Lee and the conflicted trustees. I believe that had legal advice been taken, it would have concluded there was a conflict. The conflict is self evident. By refusing to allow legal advice to be taken, it allowed the conflicted trustees to continue to interfere, to protect their personal interests. I took personal legal advice, it was unequivocal; the conflicted trustees are conflicted, and for them to continue amounts to misconduct by the charity. In view of this I was advised that I should resign, simply to protect myself. As Nick says above the conflict of interest policy is clear; it states; "Board Members should identify and promptly declare any actual, potential or perceived conflicts affecting them. They must withdraw themselves from any discussion or decision-making process where there is any such conflict." The below is my board paper in full, exactly as it was circulated ------------------- 1. Introduction Board papers have been circulated in advance of the “extraordinary” board which has a limited agenda, and is largely do deal with the Charity Commission “action plan”, recommendations. The board paper is a series of resolutions. There is concern that the paper / resolutions may not adhere to appropriate standards in terms of governance, and this could lead to trustees being in breach of their duty. If that were to happen trustees could be criticised in terms of misconduct or mismanagement, which may have serious repercussions. 2. Conflicts of interest, generally Charity trustees must act with integrity and avoid conflicts of interest as well as the appearance of conflicts of interest. Trustees have a duty to take reasonable steps to assess and manage risk to the charity. Charity trustees have a duty to take appropriate action in response to a suspicion to protect a charity from harm. Charities are required to have robust governance and risk management conflict of interest procedures in place. That is not currently the case in terms of the WPCC. The trustees have a duty to ensure that such procedures are in place and implemented in dealing with concerns raised in respect of conflicts of interest. In order to proceed correctly, it is essential that the trustees manage the conflict of interest carefully to prevent the conflict from affecting their decision making process. The consequences if we were to fail to do so is that the trustees would not have correctly discharged their legal duties and responsibilities. A subsequent investigation will consider the actions of the trustees taken at the time as well as the actions taken by the trustees upon concerns being raised regarding the risk. Trustees may face personal liability if they were to fail to appropriately address the concerns which have been raised. As trustees act collectively in running the charity there may be a collective responsibility to meet such a liability. I have asked the Charity Commission (on 1 November) for guidance as to how individual trustees would be treated, on the basis mismanagement by some but not all trustees. 3. The board papers, resolutions as currently drafted The board papers circulated have been prepared by Simon Lee, and I understand that in terms of Putney Hospital that Ian Andrews participated in the drafting. The resolutions vary, some are benign other less so. I do not intend to dissect the resolutions here, but it my view that they do not stand up to scrutiny, and have the tone and feel of being constructed with bias as well and inappropriate. The resolutions appear to ignore the advice of the Chair, Shirley Gillbe in an attempt to set an agenda that was fair and workable. Mrs Gillbe stated in an email to trustees on 6 November “Despite assurances from Ian to me, as interim Chairman, that the resolutions were in draft form I have been prevented from providing any input or comments on this paper. I have also been excluded from drawing up the Agenda and commenting on the other papers being presented to the Board.” This in itself amounts to an abuse of best practice in terms of governance, in effect a hijacking of the board agenda by conflicts of interest. The resolutions have been prepared by the CEO and a single trustee, Ian Andrews (and the further possibly with the input of connected individuals). 4. The specific issue in terms of conflicts of interest I can identify three material issues in terms of the management of conflicts of interest. These are; 1. The authors of the board resolutions (Simon Lee and Ian Andrews) appear to have potential but very significant conflict of interest in Putney Hospital generally. The WBC transaction, (ie the undersale in question) was agreed in February 2012 and completed in August 2014. Ian Andrews was a trustee at both dates, Simon Lee was employed in the between these dates, but participated in a meaningful way as CE of the charity. We now know as a matter of absolute fact that charity law and the regulations surrounding the sale of land were ignored during the transaction. Statements have been made by the then trustees and executive to levy payers and to the charity commission which are not sustainable. These statements were made disregarding the truth, and include entering into legal agreements which include “certificates” that are not sustainable. I won’t go into further detail, as it is not necessary here, however Simon Lee and Ian Andrews would appear, in terms of PH to be materially conflicted from participating further, which would include their drafting of resolutions for the board. 2. Trustees are aware that there are significant papers in respect to Putney Hospital that we are currently being denied access to. Simon Lee deliberately misled trustees when inviting them to inspect these papers at his office last month, and only last week admitted (having been asked specifically) that he removed documents from the files before they were inspected. This is a very fundamental breach of trust and no doubt will be of considerable concern to trustees. Simon Lee also warned the interim Chair of “very serious consequences for her as a trustee” if Mrs Gillbe authorised the release of the papers removed by Simon Lee. While I have no idea what these papers may contain, they are material in terms of “all trustees having all the facts”, and they will need to be produced before any agreement on how to go forward is reached. Simon Lee appears determined to ensure that these papers remain “buried”, and it is not unreasonable to suggest that there is something deeply troubling about this, particularly in terms of the management of conflicts of interest, (Simon Lee’s unilateral action in removing papers and deceiving trustees) as well good governance, Nolan and so on. 3. Lastly there is the question of the transaction. Trustees have been instructed by the Charity Commission to obtain a further QSR / valuation for the original transaction. There is the question as to what the original transaction is. The 2008 / 10 transaction, as we know was a “sham” and there is an argument that it was a “bad faith” contract. The transaction that did complete was the WBC 2012 transaction, which we now know was an undersale of some magnitude. We also know (and I have written evidence to the effect) that the trustees at the time of the sale were aware they were entering in an undersale. The sale was in breach of s117 to 119 of the Charities Act 2011, there was no QSR, no advertisement of the proposed disposition and so on. The Charity Commission were subsequently deceived by the charity and executive in their replies to whether the law was adhered to, which in itself may be a further and p[particularly serious breach of the CA2011. In short the trustees at the time of considering and entering into the transaction failed to comply with any aspect of the CA requirements. Simon Lee and Ian Andrews were both in post during this period and again as such cannot participate in any action where they could potentially influence the outcome of any enquiry. We have already seen an example of this, which I won’t to go into here, and it cannot be allowed to happen again 4. The suspension of the committees by the board appears a further conflict. The committees were introduced to try and bring higher standards of governance, and so far they appear to have been heading in the right direction. To suspend them on the basis of an informal conversations, that excluded some trustees, has the 5. Conclusion As Chair of the A&R committee I conclude that prior to any board meeting / decisions the trustees are obliged to take detailed legal advice in terms of the management of conflicts of interest. To fail to do so will leave trustees exposed to a legal challenge, and the potential circumstances of failing to appropriately address the concerns surround this subject. We will need to consider the risk to the trustees and be able to demonstrate that we have considered and addressed the risks arising from ignoring the evident conflict of interest. If the advice is that the risks are minimal we no remedial action is necessary we can move forward, and rely on this advice should there be legal challenge. We will also need to alert our insurance brokers of the risk, as if we ignore it, there is a material risk that trustees will have deliberately exposed themselves to personal liability by not considering the conflict of interest risk sufficiently. John Cameron 8 November 2015 |