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.