15 December 2023
Council met earlier today 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.
I am pleased to say that 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. You told us that you wanted the new President and Council (2023-2024) to reconsider the reforms and we agreed this at our meeting on 1 September 2023. You told us that you wanted better communication and more engagement and we have embarked on one of the biggest member engagement exercises in our history which will continue next year into the role of Council. You told us that you were uncomfortable with the idea that actuaries would be in the minority 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. You told us that you wanted safeguards to ensure the IFoA Board could be held to account and that a “bad board” could not self-perpetuate. We have responded by ensuring that appointments of members and independents to the IFoA Board will need to be ratified by Council on first appointment and every 3 years for the remainder of their term.
The Council Working Group (CWG) has also been empowered with a mandate for “blue-sky thinking” on the future of Council. CWG has specifically been tasked to devise ways and means by which to guide the IFoA Board as it develops a strategy to implement and align with Council’s vision.
The wide range of views there are on governance means that we will never be able to find a system that everyone is completely happy with. However, we believe that the new package of reforms delivers the change we need, while also reflecting the key themes of the feedback we have heard from the membership.
The full package of governance reforms are:
(i) that the Chair of the Management Body (to be known as the IFoA Board) is an independent non-executive director (iNED)
and that the composition of the IFoA Board be changed to:
iNED being someone who is not a member and who does not have a material or pecuniary relationship with the IFoA or related persons and
mNED being someone who is a Fellow or Associate of the IFoA but (other than the President) is not a member of the Council
an interim or acting Chair can be selected by the IFoA Board from one of its non-executive directors (iNEDs and mNEDs)
(ii) that an appropriately constituted Committee of the IFoA Board will in future be responsible for recommending candidates for non-executive vacancies to 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, and each appointment will be subject to consultation with and ratification by Council on appointment and every 3 years thereafter
(iii) that Council shall reserve the right, in exceptional circumstances, to remove either the IFoA Board Chair or the Board in its entirety (other than President or Chief Executive)
(iv) that the Term served by any elected President be changed to two years (from AGM 2025); and
(v) the removal of the role of the Immediate Past President upon the appointment of the first President with a two-year term (expected June 2025)
We are aware that many people will be beginning their seasonal holidays next week and we want to ensure that communication of the new reforms is as clear and transparent as possible. We will therefore wait to publish the proposed amendments to the regulations on our website until 2 January 2024, meaning that the 28 days for any formal objections does not run over the holiday period.
We will host a webinar at 10:00 am (GMT) on 11 January 2024, which will explain the reforms that have been approved in more detail and allow members to ask questions and provide feedback. Registration for the webinar is now open.
An important part of our governance reforms has always been to have a new vision for Council and the Council Working Group will begin its consultation process in January 2024. We encourage you all to participate and share your views.
Council will continue to be responsible for the process to elect the President and the first two-year President is planned to be elected in April 2024 and take up the position at the AGM in 2025. We will begin the process of recruiting the independent IFoA Board chair in February 2024. Once appointed, they will assume responsibility for the current Management Board which will transition into the new IFoA Board as new iNEDs and mNEDs are appointed. The IFoA Board will continue to operate under delegated authorities from Council for approximately 18 to 24 months. This is effectively a trial-period which will allow us to see how it works and tweak the new governance as required before being put to a member consultation and vote, which is likely to take place in 2026.
Throughout all of these changes we will continue to engage with members and communicate on key milestones as they occur. We are continuing to actively listen to members on our governance changes and you can contact us through the email address governance@actuaries.org.uk.
Kalpana Shah
IFoA President