Opposition to Charter amendment that restricts new Council’s power to take decisions to the membership
The Council of the Royal Pharmaceutical Society has voted not to support a Privy Council amendment to its preferred draft new Charter that would prevent the future Council from being able to specify that certain decisions may be made only with the approval of the membership at a general meeting or in a ballot.
The amendment does not affect provisions elsewhere in the draft Charter
that specifically require such approval for new categories of membership,
for changes to the composition of the Council, for alterations to the
Charter and for the surrender of the Charter and the dissolution of the
Society.
At the September
Council meeting, the Council heard that the Privy Council’s
advisers cannot accept a provision in draft Article 9(2) that would allow
the Council to designate certain regulations as requiring approval by
Special Resolution — which is defined as a Council resolution confirmed
by a two-thirds majority of those voting at a general meeting or in a
ballot. The provision would also have protected any regulations so designated
from being amended, added to or revoked, and from having the designation
withdrawn, without approval by Special Resolution.
The advisers take the view that the provision would risk the Council
becoming bound to a particular governance approach that, although perhaps
appropriate at one stage in its history, could not in future be changed
because of the difficulty in having a new Special Resolution approved.
The advisers believe that accountability to members and registrants should
be secured through the election of Council members rather than by the
envisaged arrangements. The Government’s view is that corporate
governance in regulatory bodies should allow flexibility to adapt to
change and to avoid having particular approaches set in stone for all
time.
The advisers therefore shortened Article 9(2) so that it just gives the
Council power “to make, amend, add to or revoke regulations for
any purpose relating to the governance, management, affairs or functions
of the Council or of the Society, whether in pursuance of a provision
of this Our Supplemental Charter or otherwise”. Article 10(2) was
also deleted because it would no longer be necessary.
The President said that the Privy Council’s advisers suggested
that the provision would unnecessarily restrict the Council’s movement,
and he himself had received comment along similar lines, that it would
bind a Council to too restrictive an area of movement.
Asked to comment, Robert Bulling (expert in charter law) first emphasised
that there was no problem with the mechanism of Special Resolution, which
would remain for the specific named purposes.
Mr Bulling went on to explain the history of the disputed provision.
In the original review of the Society’s existing Charter and Byelaws,
it had been noted that considerable amounts of detail in Byelaws were
taking a long time to implement, because of the need for Privy Council
approval of Byelaws made under the existing Charter. When the proposed
new Charter was first drafted, it was decided to try to persuade the
Privy Council that Government oversight of the second layer of regulation,
equivalent to the Byelaws, was not necessary or desirable to the current
extent. In the course of negotiations, it appeared that the Privy Council
and its advisers were well disposed to dispensing with Privy Council
control of this second layer altogether, and the first draft of the proposed
new Charter therefore contained no requirement for Privy Council approval
of regulations.
However, there remained the question of whether there should be other
checks and balances on the Council, and one idea to emerge was that there
should be a mechanism for reserving certain elements of regulation for
approval in general meeting. So that was put in at the time when the
Society did not think there was going to be the Privy Council jurisdiction.
Following the disputes over the proposed Charter, and successive rounds
of consultation with Government against the background of the dispute,
the official view changed to the extent that Privy Council approval of
Byelaws or regulations was required to be reinstated. “In a way,” said
Mr Bulling, “we are actually back to where we started. The justification
for this extra mechanism has actually gone away.”
What was new, he added, was that in the process of all this the arguments
about the risks of tying the Council’s hands through this kind
of mechanism had now been fully exposed. Given the fact that there was
again a check on the Council through the Privy Council, to which representations
could be made in respect of the regulations, the mechanism for consulting
the membership was both unnecessary and undesirable.
With the deletion, the Council would be back exactly where it is at the
moment in terms of its relationship with the membership and with Government.
The Council would draft regulations (at the moment called Byelaws), which
would then be published before being signed off by the Council and submitted
to the Privy Council for approval. That was the situation at the moment,
and nothing was being taken away.
The President said that that was helpful. By taking on board the point
that it is a restoration of the current requirement to send regulations
to the Privy Council, he was fairly content with the removal of the Special
Resolution provision.
Douglas Simpson said that there was a difference in that there would
be a completely different constitution of the Council. The draft Charter
included a provision for Special Resolution to safeguard the members’ interest
in certain areas that the Council knew would be important. But a future
Council might identify other areas in which changes should not be made
without being sanctioned by the members as a whole. It was an important
safeguard. Furthermore, if the Council sought to make regulations that
the Privy Council thought would be too restrictive, it could stop Special
Resolution being used in that way. Mr Simpson therefore saw nothing wrong
in continuing with the disputed provision.
Graham Phillips said that, as redrafted, the Charter was no longer an
acceptable compromise. He was content to have increased Privy Council
scrutiny, but the Privy Council could not have it both ways. He said: “If
they see a need for increased scrutiny by themselves, there is an equally
increased need for the potential for scrutiny by the members. That was
the reason that I stood for this Council, to ensure that the members
had an appropriate say in their future in the constitution. It is an
absolutely fundamental change to what we asked members to vote upon.
I absolutely cannot accept it.”
However, Mr Phillips continued, there may be a way forward through adding
a form of words to clarify that this particular use of special resolutions
would only apply in constitutional circumstances.
Bob Michell said that he sensed the possible imminence of a new battle
on sacred ground, and battles on sacred ground were always the most damaging.
The problem about this particular battle was that it raises the risk
once again of losing the Charter and, having got this far, it would be
extremely irresponsible to lose the Charter without an extraordinarily
good reason. There was no need to go there because the new Council [to
come into existence next year] could go back to what was intended by
the deleted words and under Section 11 could reconsider the matter without
in any way prejudicing the Charter as a whole.
Alison Ewing said that the new Council would not be precluded from having
a Special Resolution — a vote or referendum or whatever — if
it so desired.
Maurice Hickey, agreeing with Mr Phillips, said that the deleted words
would not have set anything in stone. As Mr Simpson had said, they allowed
a future Council to designate as subject to Special Resolution some matter
that could not be foreseen at the moment. The Charter was an enabling
document, and if such a provision was not enabled, it was not there.
A small change in the wording could satisfy both sides. As it stood,
if the Privy Council amendment had to be accepted, he would vote against
it, as a means of sending back to them that this one particular thing
that he found unacceptable.
Sultan Dajani said that, while the Charter is an enabling document, it
is also permissive. It takes away from the membership an important safeguard,
which is that the Council can ultimately decide in their interest whether
to go for a special resolution or not. The whole point is to give the
membership more influence. He did not believe what Professor Michell
said, that a lot of things can be agreed by the new Council under Article
11.
However, why save the fight for another day? The membership had approved
the wording as it stood and he did not think the members would agree
to the change. Everyone was happy with the existing wording, which had
been arrived at with Mr Bulling’s advice and the Privy Council
advice. Council decisions should be fair, equitable and consistent. It
was in the Privy Council’s interest as well as the Society’s
to agree the Charter as it stands, and he too would vote against the
amendment.
Hassan Argomandkhah said that the crux of the matter was that, having
reached a compromise on the proposal for a two-board model for the future
Council, the idea had been to establish by Special Resolution a committee
that had certain things delegated to it by Special Resolution (a Membership
Committee, for example) and could not be disbanded without another Special
Resolution. What the wording really did was to prevent the Council going
back on something approved by Special Resolution without a further Special
Resolution.
The President said that that was a separate issue and the Charter still
mandated the new Council to establish a body to advance professional
leadership. It was not dependent upon any Special Resolution.
Asked if he had anything to add before the matter went to a vote, Mr
Bulling said that it would be a good idea to establish those matters
that might need some form of enhanced consultation with the membership
and to work out some principles. The point about the deleted wording
was that it was a recipe for tying the Council’s hands unnecessarily.
It was not a mechanism that currently existed. It was a proposal to compensate
for a loss of accountability to the Privy Council. It was a response
to a situation that has disappeared. The new Council would still have
the flexibility to be able to require certain issues to be dealt with
in a particular way. It was neither necessary nor desirable to fight
the amendment, even if it were possible, which it was not.
The Vice-President said that there was a polarisation of views around
the Council. If there was a vote and the vote went against the recommendation,
then there would be some difficulty. Rather than rushing to the vote
the Council should take time to consider the matter and agree something
it could live with. The Privy Council would make its own mind up anyway
whichever way the Council voted. It may be a way out.
Mr Bulling said that the amendment from the Privy Council’s advisers
was a clear deletion. To try to reinstate in some other form would not
only lead to a delay, but it would get the Council nowhere.
The President said that he was going to proceed to a vote on the amendment.
A vote was taken and was lost by nine votes to 11. Those voting in favour
of the amendment were the President, Alison Ewing, Christine Glover,
Gill Hawksworth, Patricia Hoare, Clive Jackson, Bob Michell, Michael
Schofield and Linda Stone. Those voting against were the Vice-President,
the Treasurer, Gerald Alexander, Hassan Argomandkhah, Martin Astbury,
Shiv Bagga, Sultan Dajani, Davan Eustace, Maurice Hickey, Graham Phillips
and Douglas Simpson.
The President said that the Council’s decision would go to the
Privy Council as a comment on the advisers’ amendment.
Linda Stone said that the decision was
unfortunate, particularly as there had been a division in the way the
officers had voted.
Mr Phillips said that it was a fundamental issue that made him unable
to accept the Charter. He wanted to record that he wished to take that
to the membership. The Council now had a Charter that he suspected it
would not approve.
Professor Michell said that before the membership is misled by someone’s
personal antipathy towards what is actually a Government requirement,
before anybody tries to pretend to the membership that there is something
fundamentally important about opposing the deletion, the Council needs
to give a clear unambiguous legally confirmed example of something that
the new Council could not do under Article 11 despite the deletions under
9.2. “It would take a genius from Mars to do that,” he suggested.
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