North Yorkshire Moors Railway General Discussion

I seem to recall from discussion on the L&B thread (I’m not sure if you were involved in the discussion), that members proposing changes at an AGM could have that proposal dismissed by the incumbent board, if they deemed the changes to be vexatious (there may have been other allowed reasons). The members would never see the proposal never mind get a chance to vote on it.

Call me a cynic, but an incumbent board could view a threat to its power as being vexatious.

 

The limits on the power of members to give directions to the Board are that they can't require the board to do anything illegal or to act in breach of their statutory duties. An example woild be where a heritage railway is facing insolvency. In that event the directors duty changes . The must to run the company for the benefit of its creditors. The members might seek to protect precious assets by passing a resolution requiring the directors to hand over ownership of precious assets like locomotives or rolling stock to keep them out of the creditors' grasp. That would be improper and ineffective. There are other such theoretical situations but a reasoned change to the Articles abolishing or amending the role of the Nominations Committee is not be one of them. When that possibilty was raised at the recent AGM the members's right to propose such a resolution was clarified. Yes Keith in the NYMR's case you're being unduly cynical!

 

If the Nominations Committee were to decline an applicant is the decision published with reasons?

 

An interesting suggestion and I can understand why members would want to know why a candidate did’nt make the ballot. How could it work in reality? The reasons may be highly sensitive e.g. reasonable suspicion that the individual could be a safeguarding risk or evidence of past failure to observe confidentiality when necessary. The same problem would arise if the board were to say they don’t recommend a candidate because of etc. If statements were made that impugned the character of applicants they could well be actionable. The risk of having their qualities, or lack of them, made public might also deter candidates. Paradoxically the confidentiality of Nominations committee deliberations is something of a safeguard for the railway and the applicants.

 

A better (but in some ways harder to answer!) question might be "is there even a list of rejected candidates published, without giving the reasons?

Fair enough. I was quoting line speed as being the same as keeping to timetable, which I guess is probably not the same thing - but it was nevertheless a workmanlike performance and the engine didn't seem to be unduly stressed.

 

The decision was corporate and therefore questions of individual responsibility are of limited value. However, my post was based on “if I were in this situation”, and reflecting on the tone of comments made here, and addressed to you as the person speaking from within the board - I’d have framed it differently to someone with different professional experience. I’ve never knowingly met any of the individuals I namechecked, and I’ve no way of assessing their reasonableness. However, I start from the premise that people are reasonable and fair minded, until evidence goes to the contrary.

You do then mention the role of advisors. Their role is important, but they ultimately only make recommendations in accordance with the instructions that they are given. For example, General Synod is debating independent safeguarding arrangements following a report by Alexis Jay. Much of the discussion is confusing until you realise that her remit was to recommend how an independent safeguarding function could be implemented. That then leads to a second point - that the client is not obliged to follow the professional advice given, and may make their own judgments about how applicable it is. In the case of the L&B EGM last year, advisors had drafted Articles that went well beyond Charity Commission requirements, and it was clear that this was a response to instructions given.

Finally, you make the very reasonable point that sharing Nominations Committee decisions and reasoning raises issues. I agree, it does - especially where that opinion may be contentious (and if put in the public domain, potentially even defamatory). That doesn’t prevent such a committee from making a simple “we recommend the following candidates” declaration. But the problem actually only arises once such a committee exists, and it is empowered to apply a right of veto. At that point, and especially where there is not full confidence in its impartiality, the boundary between “confidentiality” and “secrecy” becomes hard to draw, and the scope for suspicion about motives grows proportionately.

All of which takes me back to the post you’re responding to - my advice is written to you, because you asked the question and have a position from which to be able to effect change.

 

A better (but in some ways harder to answer!) question might be "is there even a list of rejected candidates published, without giving the reasons?" It should not be confidential to reveal who has wanted to stand and who was or was not rejected, but I don't think we get that, perhaps because voters might draw their own conclusions about the selection process!

[Quote - LinesisclearI think your last comment is the essence of the matter. It depends to a large extent of experience of what has happened in practice. Sadly there is ample evidence on the NYMR that popularity was a huge factor making it harder for new talent to refresh the board (as was position on the ballot paper). Having counted them in the past I was amazed how many voting slips just started at the top and ticked down the list till the number of vacancies was reached. We've also had to contend with the wasted election of someone who was totally unsuited to office and only lasted for part of one confontational meeting before triggering a unanimous vote for removal. I'm certainly not trying to discourage new talent from standing. Quite the opposite. Popularity, or at least being "well respected" can create a preference based on familiarity that works against aspiring new trustees.
Incidentally in answer to Steve the privilege of appointing Trustees lies solely with the charity's membership. The only well established exception is co-option to fill a vacancy but all co opted individuals must submit themselves for election at the next AGM. [/Quote- Lineisclear]

I find this post to be very revealing in ways it perhaps was not intended to be! If potential voters in the Trust Board election can hardly be bothered to read down the list of candidates and mostly tick off the first 12 they come to, is it not likely that they'll treat amendments to the constitution in the same way? I don't believe that any reasonable explanation for the changes is ever given beyond "the Board feels that these changes are need to bring the articles up to date" and so the changes could easily be used for manipulative purposes - and, sad to say, probably have. Reducing the Trust Board size was a hobbyhorse of Lineisclear because he didn't like how long meetings were taken, so the numbers have been reduced from (I think) 24+ down to 12, with those 12 essentially mostly being the of the selection committee's choice now. Welcome to the Politburo of Democratic Republic of North Yorkshire!

 

The Llangollen failure was of a contracting subsidiary not the operating entity. In common with most heritage railways if the operating company becomes insolvent its assets would be available to creditors.

 

The reduction from a board of 24 was not because of the length of meetings. If anything they are now longer than they used to be. The difference is effective decision making. The Charity Commission recommend a board of no more than around nine or ten because beyond that they tend to become talking shops, something confirmed by any number of academic studies and indeed the NYMR’s own experience.

 

I sit a a trustee on a board of 24. Meetings are bi monthly and typically 3-4 hours long. They work well, and require some significant travel.

The size is dictated by a number of factors, including the need for proper representation and the presence of an irreducible number of ex-officio members. Elected members (9 in total) are not subject to any kind of nominations committee and are also term limited to two three year terms.

The important feature is that we trustees are very well served by the professional staff of the organisation, and therefore able to have useful and informed discussions on the matters before us. Much of the heavy lifting is done by subcommittees which report to the board, all of which contain a mixture of trustee and non trustee members.

 

Isn't discussion before taking decisions important then? Perhaps the selection committee would be better placed given a panel of trained monkeys to select from. In the past, the Trust Board contained a fairly broad range of volunteers who were actually career railwaymen, but I don't think that's the case any more - they seem to have been gradually weeded out in favour of tourism industry and museum professionals, rather ironically given the paucity of any interest in promoting and using the railway's heritage offering!

i really do dispute the ORR's interest in all things related to corporate governance - it is being used as a smokescreen here,! As other's have pointed out the ORR's interest is in safety and the culture supporting it, and in NYMR's case they probably have good reason - there have been far too many heavy shunts, for example (and I believe that several of the coaches involved in the most recent one were quite badly damaged and have not yet been repaired, so it must have been quite a severe impact) quite apart from other events. However, I do not think they have any interest in finances, unless they have an impact on safety - hardly anyone will be inconvenienced if a heritage railway becomes insolvent. So please stop fishing for, and planting, red herrings!

 

This discussion keeps going over old ground, personally I simply took my support elsewhere when the Articles were changed. I'm wondering, however, given the known issues about financial viability whether any of the paid managers actually have as part of their annual objectives reducing costs or increasing revenue by recruiting, training and using volunteers?

I can hear the arguments about turkeys voting for Christmas and managers reducing or upsetting their paid staff, however, if as seems probable there are things not being done for financial reasons then there is scope for extra help to improve business performance.

 

There are already legal restrictions on who can be appointed as a company director (you can't, for example, be appointed if you have undischarged criminal convictions). The board could also, if it so wished, stipulate certain required qualifications for certain roles, for example asking that any candidate for Finance Trustee held an appropriate accountancy qualification.

But it seems that you are going beyond that - you are holding candidates to a standard that is beyond the legal minimum but without actually stating what that standard is. So if a candidate is rejected for reasons that are kept confidential - how can they ever prove that to be erroneous? "A past failure to observe confidentiality when necessary" - how could anyone ever prove they met such a standard if told they didn't?

You may choose to ignore it, but the moment you have a committee that can vet candidates against criteria that are undocumented, it becomes impossible to prove that the committee is working in a transparent way. If you have safeguarding worries - make it a stated requirement that any member of the board will have to undergo a DBS check. That would be a proportionate response, but setting up a committee that can pre-select candidates for election against no documented criteria cannot lead other than to suspicion that it is selecting instead just according to whether your face fits.

You may feel that the committee is fair and objective and you may protest its impartiality until you are blue in the face - but by stipulating that candidates must go beyond the legal minimum for directors, yet not state how that will be judged, it is impossible to shake off the opinion that the impartiality is bogus.

Tom

 

For all the talk of listening to other's opinions, it is clear from his posts that such an approach appears to be anathema to Lineisclear - unless they are strong opinions that align exactly to his own - and there seem to be very few of those being expressed here!!

 

Martin, Thnks for the clarification. What I was trying to explain is that most of the Llangollen assets were not protected becuase they were owned by a Trust. That Trust was also the operating company that held the vital Light Railway Order and was not responsible for its subsidiary company's debts. Had it been insolvent too it would have been a very different story.
Precious assests can only be protected to a limited extent. It depends principally on whether the railway needs to borrow e.g to have an overdraft facility to cover the lean winter months. If so, the lending bank may well demand security over the company's assets. The same can be a condition of some grants. Squirreling away assests in another entity may affect the financial position of the operating company making it look like a greater financial risk for those dealing with it. In any event the crown jewels, without which no railway can operate, is the Light Railway Order or equivalent statutory authority. That needs to be held by the operating entity and is not transferable. Getting a new one if the operating company failed would be difficult and take a long time so it's likely that if a heritage railway licence holder fails there will be no re -start. Banks and grant funders may also insist on cross guarantees to avoid what happened at Llangollen. In that event all the companies involved would be liable for each other's debts. It may be possible to exclude some items from security charges ( such as locomotives or rolling stock) but that just means they would'nt automtically be at the disposal of the secured creditors. Other creditors could still force their disposal to cover the company's debts.
The final consideration is that all incorporated charities have an "asset lock" and so do many heritage railway companies. That means that if the entity folds any surplus assest left after the creditors have been paid do not belong to the members or shareholders and must pass to another similar entity. The members/shareholders may have a vote as to where they go but they can't hold on to them themselves.

 

As usual, i don't think you have answered a big part of the question, even if it was perhaps implied - who owns the assets at the NYMR - Trust or PLC? In particular, who owns the LRO? You have previously implied that if the PLC were to become insolvent (which can't be far away, given the annual losses of recent years?) the LRO would be lost along with it? Is there no reason why it cannot be transferred to the greater security of the Trust, or do you expect the Trust to continue baling out the PLC?

 

I must admit that as a lawyer myself with a bit of a charity law background I can understand the rationale for not giving the reasons for rejecting a candidate to the general membership, but I had assumed the candidate themselves would at least be given the reasons, which I certainly would recommend. Maybe @Lineisclear can clarify?

I understand the general idea of a nominations committee, but I agree that the terms of reference it is given is likely to be of more significance than the existence of an independent chair, and the fact that those not approved are barred from being elected, when lawfully permitted to do so, seems too much for a volunteer-focused organisation in my view.

Sent from my SM-S926B using Tapatalk

 

If you look at the accounts of NYMRT and NYMRplc (which are both online) you will note that no fixed assets are recorded in the latter but £19.5m are shown in NYMRT. NYMRT has given a number of charges over assets in favour of various parties to secure liabilities (including according to the accounts a chattel mortgage over 80135). plc has given a fixed and floating charge over its assets to the bank.
Somewhat off topic but one of the directors has put a fair chunk of money into NYMRT in the period covered by the most recent accounts which seems a commendable attribute when assessing suitability.;-)