The Chartered Insurance Institute has reiterated that its actions to appoint directors to the Personal Finance Society board were taken after “significant governance failings”, adding it was left with “no choice”.
In a statement yesterday (January 5), Helen Philips, group chair at the CII, said the PFS board governance failures are not, as claimed, “baseless or without foundation”, and suggestions that the CII group board has appointed further institute directors for any other reason is “deeply misleading”.
This came after yesterday, member directors and advisers to the PFS board said claims of governance failures made by the CII are not true.
Before Christmas, the CII announced it was to appoint a majority of directors to the PFS board, following failed mediation attempts.
At the time, the CII also announced its decision to appoint three institute directors to the PFS board with immediate effect.
However, in a statement by PFS member directors and co-opted advisers of the board, they said claims stating there was poor governance had not been supported by evidence.
“As member directors and co-opted advisers, we want formally to express our severe disappointment with the announcements made by the CII just before Christmas,” the statement read.
“In particular we note that the comments made about governance failures and other failings by the PFS board are not true, and not supported by any documentary evidence."
However Philip's has said the decision to appoint further Institute directors to the PFS board was not an outcome the CII group board wanted or pursued, particularly during the festive holidays.
“However, after significant governance failings were repeatedly raised with the PFS, the CII group board was sadly left with no choice but to address these failings and take this action after its December board meeting,” she said.
“Not only was this in the best interests of all PFS and CII members, it is also consistent with the general duties conferred in law on all company directors, as well as in the PFS Articles of Association.”
She said the CII group has “weathered the financial storm created by the pandemic”, while investing in its IT systems and buying out the group pension fund by deliberately utilising the group’s central reserves and “leaving the PFS and other company reserves untouched”.
“This is good business practice and was discussed in detail at the organisation’s recent AGM, along with the need to establish a new recharge model that fairly reflects the costs of delivering PFS member services, which is recognised by both Alan Vallance, CII group chief executive, and Don MacIntyre, interim PFS CEO,” she said.
“There has been no change in that position since the AGM.”
In her statement, Philips also said the new directors bring “immense professionalism” to the PFS board, and are focused entirely on protecting and serving PFS interests.
“The CII group board recognises that PFS members have important questions about the appointment of further institute directors, and we will ensure further opportunities are provided for them to be asked and answered over the consultation period,” she said.
“It is essential that PFS members are now consulted, and CII staff are already supporting this exercise as part of their normal, professional service to the PFS board and members.”
She added: “The CII group board remains deeply committed to its PFS members and - for the avoidance of doubt - there is no plan whatsoever to deregister the PFS.
“The CII group board sees no merit in such a move and wants to see the PFS flourish as a professional membership body. Nor will there be any change to any of the services received by PFS members.”
Philips said the PFS and CII are essential voices for the UK public in these challenging economic times and now more than ever, “all our time, energy and resources should be fully invested in building a stronger future, and delivering exceptional services".
Philips statement follows Caroline Stuart's resignation as president of the PFS yesterday (January 5).
Stuart said she had been working with the PFS on an entirely voluntary basis for close to eight years, both as a member and chair of the Paraplanner Panel and, since September 2018, as a member director and vice president of the PFS board.
At the time, she said: “I, along with my fellow member directors, fully refute all allegations made by the CII. In my time as both a member director, vice president and president, my fellow member directors and I have taken our fiduciary responsibilities extremely seriously.”
In her statement on behalf of the CII, Philips said: “It is with sadness that we have heard of Caroline Stuart’s decision to resign as President of the PFS board. Undoubtedly, Ms Stuart’s role has been particularly challenging over the last few weeks and I wish her a swift recovery.”
The PFS and Stuart have both been approached for comment.
sonia.rach@ft.com
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