Heritage Railway Governance

You confuse the exercise of a specific democratic process - one person, one vote - with the culture of an organisation. If GWSR has a combination of society with very specific obligations, and plc with very broad scope, the role of members becomes really important.

In that context, I find myself very uncomfortable about the way that you represent arguments about knowledge and awareness as somehow being about privileging insiders at the same time that you are advocating the creation of what are effectively closed shops.

 

No, I’m advocating boards that can secure the confidence of regulators, finance providers etc. whilst of course ensuring that the interests and concerns of volunteers and staff are given due weight.
You mention the role of members but for the operating company that means its shareholders. As I understand the GWSR model it’s the operating company that owns and operates the railway. The role of the charity is to provide support within
the confines of its charitable purposes. I believe volunteers join the charity so, unless they are also shareholders, they have no role in operating company decisions such as amendment of its Articles.

 

And there we have a fundamental issue of substance vs form. If we go back to the heart of my comments, they are about organising to deliver the goals you set out without creating a ring fence. There are other ways to achieve those objectives which don’t carry the same risks in extremis.


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You are putting words in my mouth. I never said that.

 

• It seemed to suggest that it was wrong that volunteers in the room might be outvoted by “armchair” shareholders who file proxy votes . Maybe I misunderstood but on the face of it the post implied that volunteers votes at the meeting should carry more weight than those of other shareholders?

 

Not only do GDPR laws not prevent contact with shareholders (which should be obvious as it is "for the legitimate interests of a data controller") but it is part of the duties of the Company/Trust Secretary to maintain a neutral position and ensure that all shareholder/members are kept informed of nominations together with brief backgrounds on the nominees and their proposed policies. As the majority of this information distribution can be made by electronic means there is no great charge on the organisation.

As @Steve pointed out in his post #43253 on WSR thread ( and I part quote) "Most of todays heritage railways closed because they were unremunerative and those that sought to re-open them knew that, without supporters and volunteers they would continue to be so. Sadly, a growing number of railways are turning their back on that ethos and, strangely enough, are finding that it becomes a financial struggle. This is mainly the case with the larger railways, which seem to find it easier to employ people than keep their volunteers happy and content. There are still a good number of smaller lines that adhere to their founding principles of being a volunteer led and run organisation." and "Look after your volunteers and supporters for without them, you will struggle."
Unless there is provision for the volunteers, shareholders, and members to have input into the management of their Railway (and it is their railway, morally and ethically despite @Lineisclear's legalistic arguments,) they will, in time, walk away leaving the Board with no option but to employ staff or reduce/close activities.

It also should be pointed out that shareholders/members unable to attend a meeting can nominate anybody who is attending as a proxy. They are not obliged to give their proxy to the Chairman.

 

I doubt that it would be possible to run the larger railways with an entirely volunteer workforce. Finding people to take on the management and supervisory positions on top of an existing full-time job would be difficult, together with their limited time on site. Heritage railways don't just run at weekends.

There are always going to be some heritage railways which get into the spotlight for whatever reason, and get criticised (rightly or wrongly) for their volunteer management, financial situation or management style. But there are many others which operate perfectly well with paid staff.

 

I don't see anybody advocating volunteeer only operations on the larger lines.

 

I read it as concern about the known ability of chairmen to use proxies as a way to get a result despite the feeling of those actually present. The political reality is that incumbent managements have significant advantages in such situations and proxies contribute to those.

Yet another reason why the rules governing eligibility need to be set with care so as not to create a structural blockage to change.


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@Lineclear states the modern orthodoxy of the HR movement (of the HRA perhaps too) that boards should be more “professional”. I agree that higher standards are required. RM3 is not a bad framework for running a railway. However, the @Steve was right in the post quoted above by @The Dainton Banker that too many railways have forgotten the single most important resource in this picture. The volunteer.

The changes advocated for board governance are not being enacted with sufficient focus or thought around the communication of the change AND the future communication structure between volunteers and board. A board governance model that in a well resourced commercial company is entirely sensible because there is a stable and well resourced management tree does not necessarily translate to a heritage railway where the management structure is often a lot less resourced. That’s a cue for poor relations with volunteers.

These governance changes are a cultural shift of significant proportions for most heritage railways. However, they are being dealt with with all the delicacy of a bull elephant suffering a boil on his backside. More sensitivity, more preparation, more thought about HOW to travel on the journey to the end goal and what it means for the emotional attachment of volunteers is required.

Heritage Railway volunteers are a scarce resource. It requires a level of commitment not often found elsewhere to spend a decade or so of 12 hour shifts that start early in the morning, to make steam driver, and not much less to be a porter (cleaning up sick after visitors on my day off?). If lost they are hard and slow to replace. They are very committed and this often means that they will ultimately put up with a lot that they ought not to have to. However, I sense many are poised on a tipping point. Disengage them by crew a feeling of being written out of the ability to influence their railway’s direction and watch them walk away.

There is nothing in RM3, nothing in company law and nothing beyond imagination and commitment to stand in the way of boards ensuring that the volunteers continue to feel engaged. Advisory committees for example.

Failure to replace the sense of backstop control through an AGM will (is) lead(ing) to real concerns on the ground that boards are becoming remote, arrogant, largely unseen, ignorant of the issues on the ground, full of people only looking to get a “gong”. This “us and them” situation has existed to an extent always, but it is becoming entrenched by the current orthodoxy and will lead to more and more dissent. The governance change may be desirable, it may or may not be the only way to achieve the high performing boards needed, but the biggest concern is that there is no one executing the changes well. More guidance is required on HOW to change not just what to change.

 

Well said. And to the "how" to change bucket needs to be added the "what" to change - what's coming up in several places is a sense of overreach.

 

I'd agree with much of the comment. indeed the HOW to change was one of the hot topics of debate at recent Rm3 seminars and the HRA Spring Conference. The consensus was on the inevitability of governance change from structures that were more appropriate to membership preservation societies.
On the NYMR we're requiring all Board members on a monthly rota basis to spend at least two days visiting all parts of the railway to listen to the views and concerns of volunteers as well as paid staff and visitors. They will then have to report their finding back to their Board colleagues. Apart form individual Trustees/Directors being more visible that should ensure the Board collectively are well informed on a range of issues including volunteer concerns.
I sense a determination to preserve the heritage railway ethos of volunteering that's almost as strong as the determination to preserve the railway. As a working volunteer I totally support that but I also recognise that attracting volunteers is far more challenging than it once was. Increasingly rules and regulations are taking the spontaniety and fun out of volunteering. That's not confined to heritage railways. Volunteers will give their time if its enjoyable. Having to comply with well intentioned regulations can put a dampner on that. The days when you could just rock up have a go at anything from using an angle grinder to serving in a tea room have gone. You must be trained/certificated etc. Add to that later retirement and reduced pension expectations, not to say the current cost of living pressures and you have a perfect storm. It's not that heritage railways set out to replace volunteers. By their nature volunteers are, with some notable exceptions, part time so it's a fair rule of thumb that to get the same output as you would from a full time employee you need between five and seven part time volunteers. Is it any wonder that preserving the ethos of volunteering is becoming harder and harder?
I suspect that some of the angst is because limited companies and incorporated charities are not ideal corporate vehicles for heritage railway governance especially when it comes to volunteer interests and concerns. They are not designed or structured to be democratic or representative of any group so understandably working volunteers who may not be shareholders of even members, but who still contribute to "their " railway can feel disenfranchised. It's one reason why the "HOW" is leading to interest in the use of the Incorporated Community Benefit Society structure that has more in common with the preservation society ethos whilst still affording the essential protection of limited liability.

 

Consensus is a double edged thing. I wish I had been able to sit in on those debates to better understand which risks are trying to be mitigated. I have watched a few times now where I was unsure if the risk that was being mitigated was properly and fully understood.

@Lineclear is right that volunteers are harder to attract and the amount of volunteering per person is probably dropping as people have less free time. That will not be made easier by disheartening current volunteers. Unhappy people are not the best advertisement.

The director rota idea sounds like a very good starting point at least. There is much work to be done in the area of connection and communication.

 

All of this is good and worthwhile, and to be welcomed. Yet what makes me nervous, and would in any organisation, is the inclusion of legal provisions that have the effect of limiting the power of those internal members/stakeholders.

The acid test is not how (say) NYMR directors are working on their engagement with all parts of the organisation, and then feeding that back, but what happens if the board then do not make that happen, and allow themselves to become detached from those views. Provisions like the one being proposed here are the governance equivalent of tying down the safety valves, effectively removing one of the protections against a board going so far out of sympathy with it's support base that it has lost relevance. We saw the fruit of that a few years ago in the WSRA, and how toxic the results were when ordinary members sought to regain control over an untrusted board. One of the major factors compounding the toxicity of that was the use of governance by the incumbents to make it harder for their opponents.

Law, and governance, are not about how things work when everything's fine. They have to work when things aren't, and where trust is absent. This approach undermines trust, because it places effective legal power in a small group who can be self perpetuating.

I am trustee/director of a charity that is significantly larger than any preserved railway, and which also drives passions for those it serves and could be vulnerable to factional disputes. Yet for nomination in election I just needed a proposer and seconder, the only conditions on which were that they were eligible to vote in the election. The same was true of the National Trust, which didn't put significant limits on what would be trustees had to do to be eligible - despite very contentious issues there.

Like @21B, I think that the diagnosis around the need to professionalise governance is basically sound. The issue is the remedy - where I firmly believe that the remedy chosen and being advocated in multiple places is creating the basis for a future crisis in one of our heritage railways.

 

I can think of one where it IS causing a crisis as we write.

 

That highlights the feature embedded in limited company and incorporated charity structures that they are not designed or intended to empower shareholders let alone anyone else with a stake in the organisation. Criticism of supposed limits on the power of members/stakeholders assumes there is real power to limit!
The tension between that reality and volunteer/member expectations that they should ultimately be able to control their railway's management and direction is the heart of the problem.

 

PLC board receives lucrative offer for loco X
Members/volunteers hear of offer and are outraged as the loco is useful on the railway and has been there for many many years
PLC board sells loco as it deems it knows best and can hire other locos using the sale money
Try telling the members that the board doesn't have power now...