There are over 130,000 members and it has an annual turnover of over £80m. A significant proportion of the membership is engaged in providing valuations for mortgage lenders.

Having been in operation for over 150 years and with a guaranteed income from subscriptions, valuer registration fees, training and events you should expect that Rics would be in a very sound financial position with lots of cash in the bank and reserves providing significant investment income.

Clearly it is important for chartered surveyors and the clients who employ them, including mortgage lenders, that Rics is well managed and properly governed. However, things have not been going too well at Rics recently and I think that it is fair to say that the members are not very happy.

In 2018, BDO accountants prepared a treasury management audit and report that was critical of the Rics governance and financial reporting, including advice that there was as risk of ‘unidentified fraud, misappropriation of funds and misreporting of financial performance’.

Apparently, rather than having lots of money in the bank, Rics was actually running an overdraft secured on the freehold of its head office and the governing council, together with the membership at large, were kept unaware of the critical BDO report. Four non-executive directors who raised concerns regarding the BDO report were dismissed, sparking concerns that there had been some kind of cover-up.

Following adverse press coverage and a general outcry from the members, the Rics governing council commissioned an independent review by Alison Levitt QC and her 467-page report was published on 9 September 2021. Alison Levitt’s report made uncomfortable reading for Rics management, which nevertheless voted to accept the report’s finding and implement its recommendations in full.

The report concluded that the four non-executive directors were wrongly dismissed from the management board and that sound governance principles were not being followed. The report found that the origins of what went wrong lay in the governance architecture of Rics, including a lack of clarity about the roles and responsibilities of the boards so that the chief executive and the chief operating officer had become used to operating with little effective scrutiny.

The Rics governing council has issued a formal apology to the four non-executive directors who were dismissed and offered to reimburse their legal fees. It has apologised to members of an action group who were incorrectly threatened with legal action and offered to reimburse their legal costs also.

The chief executive, president, chair of the governing council and the chair of the management board have all resigned, and a temporary chair of the governing council has been appointed as a caretaker whilst changes are made to the way in which Rics operates.

Alison Levitt makes specific recommendations, including that, in relation to oversight by the governing council, it should be provided with the minutes of all boards and committees. Financial bonuses for senior executives should be reassessed to confirm that they are appropriate for a professional membership organisation and whistle blowers should be provided with an appropriate avenue to voice their concerns.

The reports main recommendation, however, is for a wide-ranging external review of the purpose, governance and strategy of Rics, led by an independent reviewer such as a retired civil servant.

Rank and file members might be surprised to find that a review is considered necessary to determine the purpose of Rics after it has been running for 153 years.

Peter Glover is a surveyor and author of Building Surveys and Buying a House Or Flat