06/09/2021 | Briefing Note[1] to Engineers Ireland West Region Committee on the “PwC Report to Council on the Governance Review of Engineers Ireland”
We refer you to the briefing document ‘Process for the Review of the governance of Engineers Ireland’, July 2020 presented by the President (2020-2021) at the 18th July 2020 Council meeting and we quote:
“Transparency will be an important feature of the process. This should include for example a commitment to publish minutes, being open to having members contribute to discussions, development and dissemination of reports etc”.
In a letter received from the Director General (2015-2022) dated 4th December 2020 it stated that “the scope of this wide-ranging review has been considered and approved by Council.” The authors of this Briefing Note were offered the opportunity to participate in the process with PwC. In their letter of reply dated 18th December 2020 they requested “a copy of the terms of reference and scope of work documents contracted to PwC Ireland. Until we have an opportunity to review these documents, we are not in a position to confirm the matters you raise.” They are still not in receipt of either document as of 6th September 2021.
Slide 2 | “PwC Report to Council on the Governance Review of Engineers Ireland”
The 16 slide presentation entitled “The PwC Report to Council on the Governance Review of Engineers Ireland” provides the following by way of Scope:
- “One to one interviews with all members of the Officers Group of Engineers Ireland (“EI”) and the Director General (“DG”);
- Individual interviews with a number of Chairs of Sub Boards/Committees and other members of Council/Executive Board to obtain their views on governance;
- Meeting with the Registrar, Policy Officer & Deputy Registrar and Governance Executive of EI;
- Attendance and observation at one Executive Board meeting and one Council meeting;
- Desktop review of relevant governance documentation at EI including the Bye laws, Code of Ethics, Governance Handbook and Terms of Reference of Committees, where available;
- Review of governance practices at EI as compared to PwC observed practices in other organisations, including similar membership institutes;
- Review of other entities established by the Institute;”
If on the 18th July 2020 the President (2020-2021) stated to the meeting of Council that “transparency will be an important feature of the process” then why have Members not been provided with the minutes of meetings and the PwC Report on this project?
What exactly is PwC referring to in “Governance Handbook” and “Terms of Reference of Committees”? Should it not be “Membership Regulations (2018)”; “Sector Handbook – A Guide for Committees Regional branches, Engineering divisions and Societies (2018)”; “Membership Guidelines”?
Slide 3 | “PwC Report to Council on the Governance Review of Engineers Ireland”
It is hardly surprising that “all of the interviewees were of the opinion that the governance of Engineers Ireland is in a relatively healthy state….” This epitomises an environment that nurtures groupthink. It also suggests that we are not conducting an independent and unbiased review of Governance in Engineers Ireland. We make this observation on the following facts:
- The Registrar (2010-2022) was notified of a number of observations of governance non-compliance on 20th May 2020.
- The Director General (2015-2022) in a letter dated 4th December 2020, acknowledged that the Chair of the Ethics & Disciplinary Board had referred matters we had raised with the board which they had determined as “general governance issues” to be addressed. To date the Director General (2015-2022) has not acknowledged these observations of governance non-compliance and no direct action has taken place.
- Approximately, fourteen (14) observations of governance non-compliance, occurring over the decade of review 2010-2020 at various times have been brought to the attention of the Registrar (2010-2022); the President (2020-2021); the Chairperson (2009-) of the Ethics & Disciplinary Board; the Chairperson (2012-) of the Membership & Qualifications Board; and the Director General (2015-2022).
One would be forgiven for thinking that there is a power-grab agenda from the key observation following the interviews with the officers:
“Whether the governance protocols currently in place are adequate to withstand a material governance issue (eg. confidentiality breach at Council);”
And a PwC key recommendation;
“Clarify and document matters reserved/duties for Council and matters delegated to the Executive Board;”
Is this recommendation based on a critical analysis of 3.1.3 of the Bye-laws (2012) where it states the reserved duties and powers of Council and 4.2 and subsections therein of the Bye-laws (2012) which defines the powers, duties and procedures of the Executive?
What do PwC understand to be “The fiduciary duties of Council and Executive Board members”?
Are PwC aware, when making comparisons with similar institutions, that members of the Institution of Civil Engineers (ICE) have unfettered access to the minutes of ICE Council meetings?
“Overly rigid governance requirements could discourage members from volunteering their time”
This is an extraordinary statement for a professional organisation in which the majority of its administration staff are not bound to abide by the very governance requirements its Members must.
It would be more appropriate for PwC to refer to Engineers Ireland as an ‘Institution’ and not an institute, as per the definition provided for in the Institution of Civil Engineers of Ireland (Charter Amendment) Act, 1969, which states “’The Institution’ means the body corporate constituted by the Charter.”
Slide 4 | “PwC Report to Council on the Governance Review of Engineers Ireland”
Why was the workshop of Council members limited to discussing: “Role of Council and Executive Board | Tenure | Reporting & Oversight of Sub Boards / Committees | Consultation with members”?
Did “the first draft of the review findings report [which] was presented at the Council meeting held on 13 March 2021” include the other elements of the scope of work outlined in Slide 2? e.g. “Desktop review of relevant governance documentation at EI including the Bye laws, Code of Ethics, Governance Handbook and Terms of Reference of Committees, where available; Review of governance practices at EI as compared to PwC observed practices in other organisations, including similar membership institutes.”
Why is this “review findings report” not available to members?
In specifically what “similar membership institutes” did PwC observe governance practices for comparison?
Slide 5 | “PwC Report to Council on the Governance Review of Engineers Ireland”
“Merit in having lay members on Council to provide external perspectives.”
What factual evidence is this statement based on? Many members on Council do not get an opportunity to engage meaningfully as it is at present without reducing those opportunities further by including lay members. Rotating the chair of Council meetings might have a greater impact. Council is composed of Corporate Members of the Institution and should remain so.
Slide 6 | “PwC Report to Council on the Governance Review of Engineers Ireland”
“Consider aligning the term of Sectoral Chair (currently one year) with the three year Council term to enable members to leverage their experience on Council and contribute meaningfully”.
If a review of the “Sector Handbook – A Guide for Committees Regional branches, Engineering divisions and Societies (2018)” had been undertaken then it would be obvious that it is not mandatory that the Sectoral Chair is also the Council Representative. Refer to section “Council representative (regional branches and engineering divisions only)” where it states, “The Council representative is elected at the AGM from among the committee members.”
Slide 7 | “PwC Report to Council on the Governance Review of Engineers Ireland”
“Vest responsibility for implementing the recommendations of this report with a Governance committee. Additional resources may be required to implement the recommendations.”
This ‘report’ is far too vague, lacks focus and direction and displays a lack of competence in understanding governance best practice. This approach is no different than what has already taken place by the administration in replacing the strategic plan with an equally vague ‘statement of strategic intent’. Avoidance in the provision of detail for Council to scrutinise appears to be the management style.
Slide 8 | “PwC Report to Council on the Governance Review of Engineers Ireland”
Who were the “Other membership bodies” that PwC looked at as part of the review?
“There were advantages in having non members be appointed as they can bring expertise / experience which may be missing.”
What factual evidence is this statement based on? Why are the membership organisations reviewed not named? Non-members appointed to what? Even where the mechanisms already exist to appoint non-members, Engineers Ireland has failed to do so. (e.g. Clause 4.3 of the Code of Ethics (2018) states: “The Ethics Board shall have a maximum membership of sixteen persons including the Chairman and shall include up to four persons who are not Members of the engineering profession.” During the 2020-2021 term the fourth independent person was also a Member of Engineers Ireland.
Slide 9 | “PwC Report to Council on the Governance Review of Engineers Ireland”
“The legal structure in place is adequate and would mirror that of similar organisations, however more clarity is required on the role of Council…..”
Where is the evidence to support this statement? Who are the similar organisations that EI’s legal structure mirrors?
“There are no tenure limits or qualification requirements of Sub Board/Committee Chairs/members and no formal approval of membership by either the Council/Executive Board.”
The officers and administration talk big about transparency but never act in a transparent manner. This should also apply to the “Remuneration, Development and Nominations committee” [2]
The PwC observations, albeit based on a simplistic review, paint a very different picture from that of the interviewees, “All of the interviewees were of the opinion that the governance of Engineers Ireland is in a relatively healthy state…”
Slide 10 | “PwC Report to Council on the Governance Review of Engineers Ireland”
“The roles and responsibilities of the President and DG are not documented”
The roles and responsibilities of the President are defined in Clauses 3.3.1, 3.3.2, & 3.3.3 of the Bye-laws (2012). The roles and responsibilities of the Director General are defined in Clauses 3.1.5, 5.1, 5.2, 5.3, & 5.4 of the Bye-laws (2012). If a “Desktop review of relevant governance documentation at EI” formed part of the scope, how was this missed?
Slide 11 | “PwC Report to Council on the Governance Review of Engineers Ireland”
“A fundamental good governance obligation is the concept of checks and balances and the separation of powers, and that is supported by having clarity of roles and responsibilities so that there is no role confusion between those who occupy governance and leadership positions in an organisation, whether at Council, Board, Committee or Management level.”
The “separation of the roles, powers, duties and responsibilities of the Director General and those of the committees of Engineers Ireland” are specifically addressed in Section 4.2.2 of the Bye-laws (2012).
Slides 12 & 13 | “PwC Report to Council on the Governance Review of Engineers Ireland”
“Clarify and document matters reserved/duties for Council and matters delegated to the Executive Board”
The reserved duties and powers of Council are defined in section 3.1 and the associated subsections of the Bye-laws (2012). The powers, duties and procedures of the Executive are defined in section 4.2 and the associated subsections of the Bye-laws (2012).
It is obvious from the PwC key recommendations that the motive to undertake a ‘governance review’ is to shift more of the control away from Council to Executive and the DG. For example, the scope included a desktop review of relevant governance documents but none of the 12 recommendations reflect this element. There are serious gaps, conflicts of interest, and lack of clarity in the governance documents.
Over the past decade, for example, there has been a worrying trend emerging regarding the ‘Fellowship by Presidential Invitation’, which is a further demonstration of the lack of transparency and total abandonment of the very process the majority of members have to follow.
For example, the composition of an Executive Board quorum could all be either past recipients of ‘Presidential Invitation to Fellow’ along with the Officers (4) all of whom do not pay membership fees. Can this quorum ethically propose changes to membership subscription rates to Council? Do the Officers and other members of Council that are the recipients of the ‘Presidential Invitation to Fellow’ abstain from voting on changes to membership subscription rates? None of the Nine Members elected by Council are necessary for the Quorum to make decisions facilitating controlling power in the Officers.
PwC has not acknowledged that the Director General (2015-2022) and other Directors and staff employed at Engineers Ireland are non-members and as such are not required to adhere to the very governance documents that Members are and surely this “wide-ranging review” to quote the Director General (2015-2022), is all about? Placing more control in this direction is the very anthesis of good governance practice.
Furthermore, PwC in its review of “similar membership institutes” has not made any recommendation, notwithstanding the observation in the previous paragraph, that many similar membership organisations, such as the Institution of Civil Engineers, the Institution of Structural Engineers, the Institution of Mechanical Engineers, and the Royal Institute of British Architects, which would be among those “similar organisations” are registered Charities, and this type of governance structure may be more appropriate for the current administration of Engineers Ireland in this instance.
Slides 14 & 15 | “PwC Report to Council on the Governance Review of Engineers Ireland”
It would be better to organise specific meetings of Members with the sole purpose of considering the full PwC Report, not just the PowerPoint slides. The proposed consultation with members is deliberately tailored to avoid addressing the fundamental governance issues.
[1] Published with the consent of the Authors.
[2] “The Remuneration, Development and Nominations Committee under delegated responsibility sets and implements policy on remuneration and development within Engineers Ireland. During 2021/2022 the group was chaired by the President, Professor Orla Feely. The members of the committee are: • Professor Orla Feely, President (Chair), • Maurice Buckley, Past-President, • Professor Edmond Harty, Vice-President, • John Power, Vice-President.” Source: Engineers Ireland Annual Report
Conscientious Observers 