North Yorkshire Moors Railway General Discussion

Members used to ride free on trains after the AGM meeting. It's hard to do that when the railway's closed.

The timing, the venue, the notice period, and the selection of four candidates to avoid a vote does not feel right.

I'm beginning to think it stinks.

 

https://www.artscouncil.org.uk/developing-creativity-and-culture/diversity
I see nothing here that points to an appointments committee and nothing mentioned that could not be achieved through normal good governance

 

Fair enough but that would require a change to Company Law. Interestingly "proxy garnering" where pressure groups persuade members to appoint their attendee as their proxy is illegal in the USA but not the UK. If the Company were to be prohibited from inviting members to appoint its Chairman as their proxy then the same should apply to other groups.

 

I think it was only PLC shareholders who were offered a free trip.

 

I'm not sure it's as simple as that - there are a number of issues around proxies, where the advantage of incumbency gives disproportionate advantage to a board (and US corporate law is notoriously friendly to managers over shareholders).

Ultimately, as with so much in this discussion, the fundamental issue is of trust - in which being seen to act fairly is more important than just acting fairly

 

I agree it's not simple! The problem as I see it is that members , and volunteers in particular, care deeply about their railways and would like to be able to influence decisons about the way they are run. For an unincorporated preservation society that's straightforward. The management committee are elected to run the railway in accordance with the members' wishes and in their interests. Incorporation as a company upsets that apple cart and becoming an incorporated charity even more so. A standard clause in their Articles will provide that they will be run by their directors/trustees. The degree to which members/shareholders can influence or control boards becomes a matter of company and charity law and is much more limited than many assume. In particular trustees of a charity must ensure that they do not allow member pressure to create a situation where the charity is run in its members' interests. Trust is difficult to maintain because members want and expect a degree of influence , or even control, that the traditional corporate structures are designed not to deliver. We’re in danger of going over old ground but that’s why I’m an advocate for conversion to a Community Benefit Society which can enjoy the benefits of charitable status whilst being able to give more weight to the interests of its community of shareholders.

 

Fair enough and all sounds pretty reasonable. Tom and yourself seem to be our experts on such matters and you in particular have the inside information and Trustee experience.

I'm obviously aware that there will be regulatory processes to go through and some may have legal implications but, in as plain and simple terms as possible, please tell us how members, volunteers and supporters push this through and on what realistic timescale?

 

As you say, this is old ground and not helped by the need to distinguish between strategic governance - which is where members/shareholders do have a legitimate voice - and day to day operations. Many do not register that distinction, and it can poison the well.

However, focusing on the strategic level only, I think you understate the degree to which members not only can but ought to influence the direction of the board, and to have ownership of that strategy. While these discussions have often harked back to the tension between the legal duties of boards, and the directions that members may wish to give them, I've yet to see any issue arise in which a board have said, or even needed to say, "if you direct us to do this, we cannot do so because it will be unlawful for us so to do".

Observing experiences elsewhere, conversion to a CCBS or whatever may be desirable, but it is neither necessary nor sufficient for achieving alignment between members and board where there are differences. Going solely by what's been said on here, there are a number of precedents that support this contention. At the L&B, members exercised their voice and restrained a board that was going off the rails, using bog standard Companies Act processes; a refreshed board is now proceeding. Debates at the WSR eventually ended up with the management taking full control, to what long term effect is unclear (there are signals of a number of different kinds emerging). At the GCR, a change was effected by the ousting of a very highly personalised leadership. And SVR changed management, stabilised relationships, and is now on a governance journey.

By comparison, Llangollen (which you rightly say does not provide a clear pattern book for NYMR to follow if the worst were to happen), had as one of the key issues a leadership who asserted their correctness despite significant levels of concern both within the railway and outside.

All of the fundamental parts of these changes happened under pre-existing governance constraints, without conversion to community interest structure, and the debates that preceded them were resolved under those structures. The common theme is that supporters' role was acknowledged and allowed it's place - not held at arms length. My fear for NYMR is that the safety valves are being tied down, meaning that the pressure has nowhere useful to go. That will do far more damage than (preferably) using the pressure to do work or, failing that, to vent.

 

I would disagree, most are happy to take a backseat, if things are being run competently. It is only when faced with a series of nonsensical policies that threaten the heritage structures, such as in 1990, or as currently that results in a railway which is both run down and financially weak, that the volunteers and members want to intervene.
The articles as you have designed them, have no safety valve.

Sawdust.

 

Members, volunteers and shareholders essential contribution would be to support such a change. Not blindly, so it would be incumbent on the boards to communicate the reasons why it may be helpful and what would be involved. Realistically the initiative and momentum have to come from leadership not least because they would have to allocate the necessary budget. ( I've suggested previously that £50k would be a prudent cost estaimte provided a lot of the work is done by volunteers). A resolution proposing such a change could be voted on at an AGM if submitted in time for it to be included in the Notice of Meeting. However, unless the board are supportive and have communicated the benefits I suspect traditional resistance to change would be difficult to overcome. That's a good example of where boards can choose to be more accommodating. Members and shareholders only have the right to propose resolutions if not less than 5% of the membership confirm their backing beforehand. Obviously organising that number of members/ shareholders can be quite a challenge. There is nothing to prevent a board from allowing a resolution to be put to a meeting if it's merely been proposed and seconded by members but that is a voluntary decision.

 

On timescale: Obviously the Bluebell structure is somewhat different from the NYMR, so the precise steps to go through are different. But I suspect about two years might be realistic.

Looking at our timeline, the first briefing meeting for volunteers was I think in March of this year, but I suspect there was at least 6 months of analysis and planning and legal advice by a board sub-committee to get to that stage. The first substantive governance change was a motion at the BRPS AGM in June 2026 authorising that board to start the process of conversion by drawing up new proposed rules etc, and also to make a change in how we sold life memberships as preparation to align with what future membership benefits might be.

There is an EGM of the Society planned for November this year to agree those new rules. If that is successful, the Plc will hold an EGM also in November to do likewise (in our case, a formality since the Society owns 80% of the shares, but still has to happen). If both of those are successful, then there are additional steps with the FCA to go through, but the intention is that conversion would occur in February 2027. After that (in our case at least) the ex-PLC CBS has to apply to become charitable, and then has to absorb the ex-Society CBS into a new CCBS, planned for later in 2027.

So all that is about 2 years, though some of the financial benefits start to accrue from February next year.

Obviously, the NYMR may be different, but it is still likely to be that sort of order of magnitude.

In the NYMR case, I would caution looking at that sort of change as a "silver bullet" for the financial issues. In our case, there are some clear cashable benefits, but I suspect in the NYMR case, because it is already a charity, it has probably already absorbed those - most notably, it already collects Gift Aid on fares, so can't put that down again in the business case for a change. Reduced business rates for charities is again something of benefit to us, but may already have been absorbed by the NYMR. Which is not to say that there isn't a benefit: I think that kind of structure does have non-cashable benefits for heritage railways, but it is just a word of caution that making such a change on its own does not solve the immediate financial problem by delivering reduced costs or increased income.

Tom

 

2 years is 2 late.

I don’t understand how this whole situation has come about.

on my local railway a group of people with the same love for railways get together and run a railway that makes enough to tick over with a bit of help from pretty low donations and the odd grant. Disputes are internal and brief and nobody has lost sight of why they do it. They could only dream of having the location, assets and support of a railway like the NYMR.

The NYMR should be so much better. Internal disputes become external and involve resignations, bad press and long lasting bad feeling. People who love the railway end up on here in some kind of last chance ranch hoping to force change but happy to be i

 

in the company of others that feel the same way.

my regular visits that once involved around 20 days on the railway are now down to 2 for this season and I’m sad to say might be less than next season. As a low to moderate donor I have given nothing to this railway and over £1000 to my local line. Simple maths says that if 100 people feel the same way then that’s £100k the NYMR has lost but I bet it’s higher than that.

so so sad and all we can do is try and think of a new setup. Just a thought but if it costs £50k to set this up then I know a way to save £90k in a year…

 

I don't believe that all heritage railways are the same and that what works for one will necessarily work for another. It's surely no co-incidence that those implementing, or just considering, different corporate structures tend to be the larger ones which have developed into substantial businesses and, in quite a few cases, concluded that to be sustainable they need to do things differently.

 

None of them are substantial businesses, relatively they are still small businesses. The turnover may be larger now but that takes no account of the corrosive effect on the buying power of currency, that inflation brings. In real terms the NYMR isn't that much larger as a business than it was thirty years ago.

Sawdust.

 

Many thanks for the detailed and informative response Tom. As always your expertise is much appreciated.

The main reason for my questions are to see if we can find a way out of the management situation we are in. Obviously I know that for existing financial commitments it isn't the silver bullet you refer to. Longer term I hoped regaining member control might help prevent financial losses continuing as I'm sure members representatives would be more prudent in curtailing uneccessary costs, in particular adminstration at £2.7 million, diesel hire and professional fees.

For the reasons I outline below (in response to Lineisclear's reply to the questions I asked) I must confess that I increasingly despair because the NYMR setup as defined in his answer seemingly means it would be almost impossible to shift the existing leadership from opposing change as they would put self preservation above all other responsibilities.

I'm obviously very familiar with all the heritage railways listed by 35B 9and others) who are either moving towards or are already run with members and volunteers central to policy decisions.. I've visited them all many times. Whenever i visit the Bluebell I never fail to be impressed with what has been achieved in terms of expansion but without detriment to the heritage feel of the line. The NYMR used to have that same atmosphere but now diesels have drained that appeal whilst management has drained the reserves. Unless something changes we may all be mourning a lost cause.

As with Tom (above) thanks for responding to my question.Unless I'm misunderstanding, your answers though clear aren't going to provide a solution that can be achieved. This is because the Trustee - PLC pact seems to hold all the cards.

Unless I'm mistaken you state current rules require that for a formal proposition for change to be pursued we need to first contact and obtain agreement of 5% of total membership. Even if that could be accomplished it would still be entirely at the mercy of the Trustees, holding the vast majority of proxy votes as they do, who would have to agree. Further the AGM notice on the official website gives precisely no information about how or in what timescale such propositions can be made. You say proposals have to be made within the permitted period before an AGM just 28 days away. I've looked out documentation from previous years (which were far more honest and open) and at that time 30 days before was specified. So, though you don't say so, am I right in thinking there would now be a 12 month wait before we can even ask?

You do say that seconded propositions can be submitted without the 5% member endorsement but then these would be even more at the discretion of management, presumably still with the 30 day cut off? You describe this discretion as a "voluntary decision". This is spectacularly ironic as it is yolunteers and supporters who are seeking the change.

If I am wrong in my reading of your explanation then I would be delighted to be corrected but it seems that not only are valid criticisms falling on deaf ears but members are now hands tied, legs shackled and eyes blindfold whilst the Trustee - PLC axis carry on without any restriction, safeguards or semblence of accountability. To ask for a £1 million per year funding from supporters on that basis is beyond all reason.

 

I think the reality is that the board are not proposing such a change now, and that any attempt to force it on to an agenda would be out of time for the AGM.

More importantly, it is far from obvious that a structural governance change is the way to resolve the current management situation. At the most basic, it will conflate two very different topics. More seriously, it will put governance at the centre of a battle that is fundamentally about personalities, and the ability of some of those individuals to turn things round. That needs rather more rapid action and, without the willing participation of the board, it is hard to see how that will be made to happen without the sort of campaigning that we saw at the WSR.

 

Agreed that on timescale alone propositions for the AGM are a dead duck. I too think personalities are part of the problem but although my criticisms of both CEO and recent trustees have been repeated and long standing they are pointed in that direction due to their refusal to see the futility of continuing on the same path.
Regarding a structural governance change my own view is that something along those lines is needed if only to prevent a recurrance at some point in the future. The current management situation certainly needs immediate and urgent resolution as you say but I'm at a loss to see how, without a structural change, anyone outside the Trustee - PLC relationship has the power to intervene or any rapid action to be imposed..
Lineisclear has now twice indicated that change is needed but then raises obstacles as to why it can't happen without Trustee support. Given that he was chair of the trustees until just over two months ago the fact he did nothing tangible towards that change while in office rather casts doubt on his intentions.

 

I only differ from you on the question of timing - the success (so far) of changes at SVR and Bluebell reflects a level of joint commitment to effective change, without which I do not believe effective change can be achieved.

Unfortunately, the immediate issue is with a leadership who appear to consider themselves to have the answers, and to need not to have intervention from the wider membership on their strategic decisions. That position is, legally speaking, pretty strong and there are few formal routes with which it can be challenged.