RIAI GOVERNANCE

“The more openness, the better”

Below is my transcript of an open letter from past President Eoin O Cofaigh.
The letter is written to Carole Pollard, the current RIAI President.

I am neither a friend nor a colleague of the author, but I am keen to support a discussion on RIAI governance.
Whilst the contents of the letter are of special significance to the profession, there is also an important public interest aspect.

The public deserves exceptionally high governance standards from a private, limited liability company such as the RIAI.
That special obligation arises because:-

 The RIAI benefits from a system of State awarded self-regulation (although clearly out-dated, this particular Closed Shop remains firmly entrenched).
 The RIAI is authorised thereby to exercise its power over the livelihoods of others, be they RIAI members or not.
 The RIAI collects and retains the Statutory registration charges.

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6 UPPER MOUNT STREET, DUBLIN 2 21 September 2016

Ms Carole Pollard, President,
The Royal Institute of the Architects of Ireland,
8 Merrion Square, Dublin 2.

Dear President,

1 – Introduction

Thank you for your work, and your efforts to reconstruct the Institute since taking office.

Two things in particular which you have said have resonated with the undersigned.
The first was when, writing at the time of Ms Meghan’s appointment as CEO, you talked about promoting a culture of transparency in the Institute, and gave concrete evidence of steps in that regard.
The second was at the recent AGM, when you talked about a fresh start for the Institute in relation to protecting the Members’ interests and in focussing Institute activity on tasks relevant to the membership.
These remarks were echoed by the CEO who several times asked the pitifully small number of us in attendance to tell her, if there were things we wanted done or felt should not be done.

This is all heartening, and the possibility of a “new beginning” is welcome.

There are three nettles which the Council and the Officers, led by your good self, must grasp openly and honestly before a certain cohort of the membership can feel any possibility of a reconciliation with the Institute.

2 – To honestly and openly account to us over the cost of the CEO’s final year

We have been told of the €238,000 settlement, €12,300 legal fees and €54,000 spent on the Institute’s own legal fees.
This does not include Mr. Graby’s remuneration by way of salary, pension contributions or otherwise from January to September.
This seems to exceed €250,000.
Mr. Graby cost us close to €600,000 in 2015.

This equals the full deficit in the accounts for 2015.
We are paying for this, and we are told we will have to pay increased membership fees in years to come because of recurring deficits.

The settlement, following legal advice, which advice cost the members a staggering sum – almost five times what we are told we paid Mr. Graby’s lawyers – was to avoid “reputational damage to the Institute”, as the Treasurer told us, in the event that Mr. Graby had brought proceedings against the Institute.
But there was greater reputational damage done to the Institute among at least some of its own members, by the failure to disclose the full details of the settlement and the events which led up to it.
And €54,000 in fees to the Institute’s own lawyers would have gone a very long way in an in camera Workplace Relations Commission hearing.

How do Council stand over a situation where, in order to avoid reputational damage, they agreed to a situation where Mr. Graby was to cost us almost €600,000 in 2015?
This is €250 per registered Member, those 2,416 of us who pay the annual registration fee.
How many members’ annual income does this represent?

We were also told that Mr. Graby had no written contract with the RIAI.
But did not your predecessor in office but one make an agreement with Mr. Graby during her period in office?
Why were we not told this?

Putting the Members’ concerns at the heart of RIAI activity involves facing up to the cost to every one of us of the last five years and of 2015 in particular.
We need to hear the full truth, so as to then set it aside, and to move on.
The AGM accounts did not provide this in relation to Mr. Graby’s last year and the presentations at the AGM did not help in any way.
Council should give us, the subscription-paying registered Members who are footing the bill, a full and frank disclosure of the costs of all this and of why the chose to impose this burden upon us.

3 – To honestly and openly account to us over the Institute’s changed policy on BC(A)R

At the AGM, the Honorary Secretary, in his capacity as Chairman of the BC(A)R Steering Group said that “there are problems for liability with the wording of the Certificates”.
That is the first time anybody at an RIAI Top Table has ever said that.
Mr.Kennedy’s 2015 RIAI submission to the DoECLG never mentions “certifier liability”.
It has taken three years for the RIAI to tacitly admit that those members who opposed the system were right.
Why so long? Why so hesitantly and secretively?

In the teeth of RIAI hostility, some of us obtained and paid from our own pockets for Senior Counsel’s Opinion which explained this problem clearly, about S.I.80 of 2013 and again about S.I.9 of 2014.
The response of the President of the day was to say that “BC(A)R is a great chance for architects” while Mr. Graby welcomed the regulations in a press release.
Our concerns were over-ridden.

BC(A)R was rather a “great chance for the RIAI”.
By restricting those who could sign the certificates to paid-up people on the register of architects, the RIAI hoped to secure its subscription income for many years to come.
And this ignored the liability and workload implications for the membership.

At least some of us can feel proud that we played a role in getting the BC(A)R burden lifted from members working on one-off housing – while noting the Institute’s, happily failed, opposition to S.I. 365 of 2015.

It is time to acknowledge that BC(A)R is and has been a disaster for the profession, in terms of ongoing open-ended liability, in terms of lowly-paid workload for those who feel obliged to provide the service – including those practices using fees from Certifier roles to trade their way back from near-insolvency.
Listing BC(A)R in the middle of a long list of concerns is the opposite of openness and cannot bring any fresh start.
Mr.Kennedy’s strategy of trying to change the Civil Liabilities Act will consign the profession to decades with no change.

Putting the Members’ concerns at the heart of RIAI activity involves, firstly, acknowledging openly to the membership, and then facing up to, the damage done and still being done to architects by BC(A)R.
The recent publication of new Architect/Client agreements is welcome, but the failure to take on board the concerns a number of us articulated in Merrion Square at a day-long workshop now already two years ago is incomprehensible.
The Institute’s job is to protect its own members.
This is not happening.
The BC(A)R problems are being ignored.

Furthermore, the continuing absence of any advice to or support for those members who realize that the roles of Assigned Certifier and Design Certifier carry intolerable risk and who refuse to engage in the roles confirms the belief among many members, the writer included, that the Institute’s main objective is to support BC(A)R in its present form rather than oppose it.

The CEO invited feedback from the Membership on tasks which need to be done.
Well, one urgent set of tasks is to support those Members who want nothing to do with the BC(A)R Certifier roles.
What about a set of BoQ and specification clauses to have this task priced by the tendering contractors and built into the Preliminaries?
This would get our clients a good price for same, as it would be part of a competitive tender.
What about a set of letters to clients to explain why we are not doing these roles and proposing alternatives?
My office has such preliminaries and such letters.
I am willing to lead a RIAI BC(A)R workgroup share them with colleagues with a view to pooling wisdom, and to look at all ways to support colleagues who so wish, on condition that this has Institute endorsement and support.
I made the offer already in April 2014.
I repeat it. I await the call.

4 – Governance

You have taken steps towards better governance through advising the members of the new CEO’s basic salary – although not the full remuneration package? – and have led through personal example by terminating your company’s service contract with the Institute.

You have also had the EGMs to reorganise the Articles of Association.
Some of us opposed the restructuring, on grounds which need not be repeated here.
The majority of the small number of members who expressed any interest in the matter disagreed with us.
That’s fine: time, about three years I believe, will again tell whose judgement was correct.

But the heady excitement of a strategic restructuring of the RIAI does not address the prosaic day-to-day governance issues with which a number of us have been concerned and over which we resigned from Council this time two years ago.

Charity sector governance weaknesses are widespread in Ireland.
Rehab and OCI are a few in a long list.
The Institute has similar problems.
The first step in solving problems is to admit them.
The new Articles of Association deflect attention from the real day-to-day governance problems of controlling senior management excesses and accounting for the members’ money.
When the previous Treasurer brought the then Council’s attention to the €500,000 paid to the Graby-family Bluebloc companies, he got little or no support.
In 2015, the Institute spent the best part of €100,000 on legal advice.
Is this not a profligate use of the members’ hard-earned money?
Is this really good governance?

The old set of Articles of Association prohibited payment of RIAI funds to Council members.
Why does the new set not likewise prohibit?

The members earn their living from the practice of architecture.
The support which the RIAI provides through Practice Services is expensive and central to our concerns.
You recently announced the strengthening of the practice staffing through the appointment of a new person on the Practice staff.
But Mr. Graby had already appointed that person some years back!
Perhaps they are indeed the best qualified person for the job: one hopes so.
But the membership is now paying for a practice division whose Director and Assistant Director studied architecture in the same school and at the same time as Mr. Graby, more or less the same age as he, now 71, and first appointed when he was in charge.

May we have your assurance that all contracts and competencies in this area of central concern to practising members are as the membership would want them to be?

The 2015 accounts record a €17,000 payment to Bluebloc, the Graby family company.
May we have your assurance that this contract has been reviewed and either that no more suitable provider of the services which the membership has paid for from Bluebloc is available, or that the contract has been terminated?

The accounts record substantial payments to the Institute from RIAI Insurance Services.
This is, of course, commission which the Institute receives for directing business through Marsh to selected PII and other underwriters.
This year, PII premia are up by 20-40%!
How much of this increase is to flow to the Institute?
Is this an honest way to take money from the membership?
May we have your assurance that the management of RIAI Insurance Services has been reviewed?
Is it time to retire the present directors, who have given years of voluntary service?
Is Mr. Graby to stay on as a director, even though retired as CEO?
We deserve to be told: the money flowing through the company is the members’ own money.

Council made a voluntary disclosure to Revenue and paid €66,000 related to income tax on money paid to others.
Were any efforts made to find out whether those people had already paid the relevant tax?
If not, why not?
Insofar as those payments were to members, what effort was made to acquaint those people of their ethical duty to pay whatever tax was owed on money paid them?
Why should I be required – as I and we all have been – to pay income tax on money on which some other member owes the tax?
Did these people include senior members of the Institute? Council Members, or Officers?
Can we have any reassurance on all of this?

The Treasurer favours a substantial increase in subscriptions.
Presumably the Institute will be seeking the Minister’s approval for the increased register retention fee.
Can you assure us that the Institute will account openly and honestly to the Minister about the true cost of maintaining the register, and not, as when in 2008 the submission “proved” a per capita cost of registration of €578, purport to show that this cost is now €600 per head, as a prelude to charging us that amount?
Members’ incomes have recovered in the past couple of years and are already back to 1996 levels.
Is this kind of increase in compulsory fee really a proper discharge of Council’s fiduciary duties to the membership?
How do they justify this beyond saying “we need the money”?

In any event the arrangement which paying the same fee for registration only, as that for registration and full RIAI membership is to suggest that RIAI membership has no value.
This is a nonsense.

The salary of the new CEO represents a saving each year of, give or take, €150,000 on that of her predecessor.
Add to this – all in the 2015 accounts and deficit – the €238,000 golden handshake, €65,000 on legal fees for Mr. Graby’s retirement; €66,000 on the voluntary back payment of tax to the Revenue; €35,000 on recruitment and temporary staff – and €544,000 comes off the expenditure for 2016.
At constant rates, and not counting the Corrigan House income, the deficit will be €73,000.
Do you really need to raise the subscriptions?
The mooted increase looks very like a monopoly body abusing its position to charge a captive membership as much as it sees fit without considering that membership’s ability to pay.
Is this the sort of Institute we are set to have?

5 – Conclusion

The above is not a complete list of matters to be faced up to, but to face up to these would be a good start.
Please circulate this letter to the Council.
I myself am circulating it to a number of colleagues and if they circulate it further, I have no objection.
The more openness, the better.

There has been much vilification by a small number of senior members of this Institute of my own and colleagues’ motives in seeking better governance of the RIAI, and in seeking RIAI policies more suited to the profession’s real needs.
It should not be necessary to say – but seems to be – that our motives have been and remain to advance the interests of the architectural profession; but, where those interests clash with the interests of the representative body, we put our colleagues’ interests first.
You might kindly acknowledge the truth of this and the sacrifices we have made.
If you cannot or will not, I take comfort from the fact that my colleagues abroad have done and continue to do so.

A new beginning is an admirable goal.
We all support you in that regard.
I am aware that most of the above represents “inherited problems”.
But – that’s the way the system runs, also in the new Articles of Association.
Your response, which should not be a private letter but which should be a statement of a new beginning to address members’ real concerns about how the RIAI is run, is awaited.
Something less than 2% of registered members attended the AGM – not a mark of a healthy organisation.
At least some of the 98% who did not indeed await a new beginning, one to which we can with confidence subscribe.

Sincerely yours,

Arkitekt MSA Eoin O Cofaigh FRIAI

Honorary Member, Bund Deutscher Architekten, Berlin
Honorary Member, Bund Deutscher Baumeisterer, Hamburg
Honorary Fellow, American Institute of Architects, Washington
Honorary Member, Union of Architects of Russia, Moscow
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