Council met on 15 December to reconsider the governance reforms that it voted for in June in light of the 194 objections it received over the summer and the feedback it heard from the recent member engagement programme.
Council reached agreement on a revised package of reform measures which we believe balance the need for change and the benefit of more independent involvement, with the desire of members to ensure that the IFoA continues to be led by actuaries.
Council devised and ultimately voted for revised measures based on the member feedback it had received on the previously approved reforms. Majority of concerns were around the IFoA Board composition that would leave actuaries as a minority group on the Board. We have responded by changing the makeup of the new IFoA Board so that it will continue to have a majority of actuaries.
The reform package seeks to align the IFoA with best practice in corporate governance. It defines authority more clearly, establishes an IFoA Board consistent with modern governance standards, and focuses Council on strategic questions such as developing a long-term vision for the future of the profession.
This will allow the Executive to run the day-to-day organisation, overseen by a suitably qualified IFoA Board. This IFoA Board would have the right experience and an appropriate mix of independent non-executives and non-independent (IFoA member) non-executives. It is anticipated that at least some of the other independent Board members will have experience in high-performing membership (or similar) organisations, bringing external perspectives and skills.
At the same time, Council, as the democratic embodiment of the membership, will take a more visionary and long-term view with a forthcoming consultation looking specifically at the role of Council.
In addition, Council will remain the body with the ultimate authority to replace the Board Chair or Board if necessary.
The result will be a more resilient, efficient, streamlined, agile governance structure better suited to the challenges presented by a rapidly changing world and a growing, global membership.
You can watch a recording of the recent IFoA governance reforms webinar that explains the reforms that have been approved in more detail.
The Council has approved amendments to a number of the IFoA’s Regulations. The votes approved by Council make the following changes:
Element |
Detail |
|
IFoA Board Chair |
An independent non-executive director |
|
IFoA Board Composition |
3 independent non-executive directors (1 of whom shall be the Chair) |
|
IFoA Board Appointment |
An appropriately constituted Nominations Committee(s) will in future be responsible for filling non-executive vacancies on the IFoA Board (other than the President, who will be an ex-officio member of the Board, as of right). Appointments will be made following an appropriately objective skills and competency-based selection process |
|
Presidential Terms |
The term served by the President increases from the current one-year to a two-year term; the first official elected with this term is expected to serve from the AGM in 2025-2027 |
Council will be responsible for creating a long-term vision representing the views of IFoA members, and articulating to the IFoA Board what IFoA members need to be successful from their professional body in terms of member experience, thought leadership, education, learning and regulation. The IFoA Board will then be responsible for how this vision is delivered, alongside overseeing the ongoing operations of the organisation. The details of how Council and the IFoA Board will work collaboratively together is one of the areas the Council Working Group will cover as part of its forthcoming member consultation.
Council would retain appropriate powers for existential decisions, in accordance with the IFoA’s Royal Charter, with the power to replace the Board Chair or Board if necessary.
Throughout early 2024, Council is consulting members on the future role of Council. For more information, see our Council Working Group webpage
The IFoA has been through a thorough process to understand the effectiveness of our current governance framework and to consider recommendations made to improve the position. We sought external and expert professional advice, with a review spanning several months to ensure input from a range of stakeholders. The review’s findings concluded that the current governance structure (as of June 2023) does not support the IFoA’s future direction. The review resulted in a number of proposed changes to the organisation's structure. Council considered all proposed recommendations and overwhelmingly accepted that the agreed proposals were most appropriate for the IFoA’s purpose and structure. Following the largest member engagement programme in the IFoA’s history, Council voted on and agreed a revised set of reforms.
Our current structure sits outside of the desired risk profile. In our profession, we are often looking at risk profiles of other businesses and we at the IFoA must be consistent with best practice. This means the creation of a new IFoA Board with an independent Chair.
These reforms will result in a more resilient, efficient, streamlined, and agile governance structure better suited to the challenges presented by a rapidly changing world and a growing, global membership. Decisions can be made more effectively and efficiently which will ultimately benefit the member experience. We are particularly excited about the potential for Council to take a much more visionary and directional role in the future of the profession, focusing on the long-term future of the profession as well as member experience, education and regulation.
Council will be responsible for creating a long-term vision for the profession which represents the views of IFoA members and articulates to the IFoA Board what IFoA members need from their professional body to be successful in terms of member experience, thought leadership, education, learning and regulation. The IFoA Board will then be responsible for how this vision is delivered, alongside overseeing the ongoing operations of the organisation. The details of how Council and the IFoA Board will work collaboratively together is one of the areas the Council Working Group will cover as part of its forthcoming member consultation.
The revised role of Council is designed to reflect and amplify the voice of the membership. Council will be responsible for a vision for the actuarial profession and acting as an advocate for the IFoA’s membership, strengthening the voice of members in all areas (e.g., the membership experience, thought leadership, education/lifelong learning, and regulation).
The world around us is changing at pace. The shifting nature of global risks, the rise of artificial intelligence and the difficulty in attracting top talent are just some of the challenges our profession is currently facing. It is therefore important the Council focus on how the profession navigates these changes and provides qualifying and qualified actuaries with the necessary guidance and tools required.
How this works in practice will be agreed upon following the ongoing consultation with members around the future of the IFoA Council.
Council would be entitled to hold the IFoA Board to account on behalf of members as the custodians of the profession. There will be a duty on the Board to have regard to the Council’s views and Council will retain the power, in extremis, to remove and replace the Board Chair or the Board itself.
No. As part of the reforms and the safeguards we are putting in place in the structure, the Council would be entitled to hold the IFoA Board to account on behalf of members as the equivalent of ‘shareholders’ (owners). There will be a duty on the Board to have regard to the Council’s views and Council will retain the power, if completely necessary, to remove and replace the Board Chair or the Board itself.
The exact nature of this structure will be agreed upon as we implement each stage of the rollout.
These proposals have been approved by the Council and will look to be implemented over the coming months. There are a number of member votes needed to ultimately change the way we are run but these reforms are strongly backed by the elected council members to ensure that the IFoA can practise good governance in line with external governance standards expected of any organisation.
The IFoA is committed to providing the best possible education, guidance and community for current and aspiring actuaries. It awards the qualifications that underpin our work; it represents the profession and its interests externally; it thinks about the future of our profession in a changing world; it brings together actuaries in professional networks and at events; it sets professional standards, and - for some – it is also a regulator. The IFoA is also a community where lifelong memories and strong friendships are forged. The IFoA is, for many of us, a community where the actuarial profession lives and breathes.
It is therefore imperative that we are well-structured to serve our members and continue to maintain our independence. These reforms will allow us to do this while helping to refocus the Council’s efforts where it really matters, concentrating on the long-term future of the profession and member issues.