Snobbery about public’s trust (Gary Robinson and Jonathan Wills)

The Shetland public should be very alarmed that the trustees of the Shetland Charitable Trust are now seriously considering a new 15-member constitution that would give a rump of seven elected councillors the power to appoint eight privately vetted “independent” trustees who’d decide the trust’s spending.

This fundamentally anti-democratic proposal would hand control of the trust’s oil funds – and the potentially huge new windfarm revenues – to an unrepresentative group of “trusties”.

Those who advocate a hand-picked majority of unelected trustees fear that holding an open election for the eight non-councillor posts might produce “random” results (although some of these opponents of a democratic trust are pretty random themselves, you might think). They allege there aren’t enough well-qualified, public-spirited citizens likely to want to volunteer for the honour of being trusted guardians of the public’s wealth.

The Undemocrats believe selection, rather than election, will give the trust “the range of skills and experience” it needs. This reflects a serious misunderstanding about the nature of the Shetland Charitable Trust. It might be appropriate to fill a small family trust or a single-purpose private trust with lawyers, accountants and “human resources” geeks, but the Shetland Charitable Trust is a public trust. The most important attribute for a public trustee is that he or she is trusted by the community to represent their interests when spending millions of pounds of public money a year.

Our trustees don’t need to be experts in accountancy or the finer points of charity law, although it’s handy if they are. They merely require intelligence, common sense and probity. If elected trustees need training, the trust can provide it. It already does. If there’s a shortage of some skills and experience, the trust can and does buy in professional expertise of the highest quality.

The Undemocrats’ insistence on selected, rather than elected, trustees reveals a disturbingly patronising attitude to their fellow citizens. It is, in a word, snobbery. They obviously don’t trust the thousands of Shetland residents who give their time, skills and experience to help run hundreds of voluntary organisations. To suggest that we couldn’t persuade just eight of these citizens to stand as truly independent trustees is contemptuous and insulting. However, if the cynical snobs are right and not enough candidates come forward for election, then the trust already has the power to co-opt suitable trustees. But at least we should try to hold democratic elections first. If a poll throws up some entirely unsuitable trustees, again the trust already has power to discipline, suspend or exclude them if their behaviour endangers the trust.

It’s clear that the Undemocrats intend to push through their fudged, embarrassing and damaging “reform” before the council elections next May (possibly as early as next month), and to do so without full public consultation on the final proposals. They’ll have a fight on their hands because some of us will do everything in our power to keep control of Shetland’s community funds in the hands of elected representatives, be they councillor-trustees or directly-elected trustees, because they alone can be truly independent and accountable, rather than the creatures of a discredited clique.

Gary Robinson and Jonathan Wills
Shetland Charitable Trust.


Add Your Comment
  • Alan Skinner

    • August 18th, 2011 14:00

    As a lawyer, and former CEO of two major trust companies, I am a professional in this space and inevitably despised by Messrs Robinson and Wills. However, they make one point with which I must agree. They state “The most important attribute for a public trustee is that he or she is trusted by the community to represent their interest when spending millions of pounds of public money a year”. Even Messrs Robinson and Wills must appreciate that trust in the present trustees disappeared some time ago and that change is essential and urgent.
    I do not wish to impugn the integrity of any of the councillors. I only know one and he has my utmost respect. I simply believe that they have allowed themselves to become completely confused between their roles as councillors and their roles as trustees. I believe that they are individually and collectively in breach of their fiduciary duties as regards the Viking Energy project. It is unthinkable to a trust professional to commit 30% of the trust’s assets to one private equity project. Even if they had an independent report strongly recommending the project, 5% of the trust’s assets would be a prudent maximum investment.
    I am alarmed by the proposed 15 man trust board, with seven councillors. It seems too big and unwieldy to me, and the politics will be horrendous. I would prefer to see all the councillors resign, the appointment of a paid Chairman ( a recently retired Scottish judge springs to mind) and the election of independent trustees (i.e. no councillors). This constitution would allow trust to be re-established and would allow Shetland Charitable Trust to function in the way that was originally intended. The “discredited clique” would be at an end and the charity regulator could sleep at night.

    Alan Skinner
    New House

  • Maureen Bell

    • August 18th, 2011 15:11

    I am delighted to see the comments from a lawyer. Clearly the current councillors/trustees are not aware of Trust Law which very particular about the duties of trustees and their appointment. I recommend that definitive advice is sought and acted upon immediately.

    Maureen Bell

  • Alan Skinner

    • August 18th, 2011 17:11

    SCT are advised by Scotland’s leading lawyer in this field, and I have no doubt that he has been giving the trustees excellent advice. However, it appears that they do not want to listen to his advice because it is not what they want to hear.

  • Ali Inkster

    • August 18th, 2011 18:13

    They sorry we paid £20 grand for definitive advice not that long ago and they have decided to ignore that advice. One of the definitive points of that advice is that the councillors could not make up the majority in any quorum and this proposal comes nowhere that. Not only that but the council want to appoint their cronies to the other trustee positions. I don’t know about the rest of you but I say this stinks to high heaven.
    Lets just say they still don’t have my trust.

  • Erik Moncrieff

    • August 18th, 2011 18:34

    I find the following statement from Mr Skinner thought provoking: “…and would allow Shetland Charitable Trust to function in the way that was originally intended.” I wonder what he believes that intention specifically was. It has been my understanding that a large number of the issues currently troubling the trust are due to significant changes in trust law since the CT was established. At that time it was the standard method used to manage such lumps of money. Things have changed and so must the trust, but I think it is historically inaccurate to assume the CT was originally intended to be anything other than a tax-friendly council controlled fund.

  • ian Tinkler

    • August 18th, 2011 19:12

    No chance Maureen. To much self interest, expect this load of self servers to do the right thing, put the public interest first? not a hope in hell.

  • douglas young

    • August 19th, 2011 21:29

    The intention of the Trust was originally to benefit the residents of these Islands and as such is failing badly. There is absolutely no requirement for any Councilors to sit on it. It was originally a tax-avoidance vehicle for “charitable” projects. I too am pleased to see a real lawyer commenting; I am sure he could have explained the point of law for a lot less that £20,000

  • Michael Garriock

    • August 22nd, 2011 14:50

    Quote Erik Mincrieff: “….but I think it is historically inaccurate to assume the CT was originally intended to be anything other than a tax-friendly council controlled fund”.

    I would tend to agree with that. The council however are charged with the task of operating in, and serving Shetland and Shetlander’s best interests, and therein, as I see it at least, lies a notable proportion of the issues which give rise to current CT criticism.

    Oil, from where, one way or another all of the CT funds can trace their origin, was an opportunity to earn, and an event largely foisted upon us from outwith, which we, as a community had a right to expect, and have received, a certain level of monetary compensation for. When it all started there was no suitable local body other than the council to negotiate terms for the above, nor recieve funds on behalf of the community.

    The council did what they thought best at the time to handle these issues, and for probably over two decades there was little public criticism of how they had done, and were doing so. Could they have established a “better” arrangement? Could they have placed the funds in such a way as gained a higher level of income? Could they have spent what has been spent more “wisely”? Who knows. You can mull and argue all of those along with any other “what if’s” you care to, for as long as you like, and still be none the wiser. It is difficult though to argue that Shetland and Shetlander’s have not enjoyed, and continue to enjoy many benefits funded by the CT, which we would not have had had it not been there. The point being, that while the arrangement may have been far from perfect, it was perfect enough that there was no real opposition among the public for it to continue as it was. Investing the funds in the market with relatively “safe” companies, as a result of professional advice, and distributing the earning among various bids, while maintaining an untouched core fund seemed to be, if not an ideal arrangement, one that at least worked reasonably well, and all interested parties were at least willing to live with.

    The issues raised by the Charities Regulator almost certainly would have occured anyway, and some change would have been necessary as a result regadless, however it seems to me that it is the changes in how the Trustees have run the Trust in recent years that is causing the biggest issue, and perhaps has in doing so exposed a significant flaw in the previous arrangement for appointing them.

    Moving from only investing in relatively “safe” and “established” market listed companies, to investing, and considering investing a great deal more in a large green field industrial development which they also plan to operate as a commercially profitable enterprise, is quite a leap and steep learning curve for any organisation. Is it any wonder a notable proportion of the people on who’s behalf the CT Trustees are guardians of “their funds” feel if not concerned, at least a little jittery?!?

    As long as the CT didn’t do anything that raised concern with the population they act on behalf of, little notice seemed to be taken how the Trustees were appointed, after all, they seemed to be doing okay, “if it ain’t broke, don’t fix it”.

    Exactly what part the Trust’s decision to change it’s investment poilcy has played in bringing the Trust’s composition under greater scrutiny in arguable, and largely irrelevant, as it has certainly had some. Having done so, it has served to illustrate just how little say we, the electorate, have in either how the Trustees are elected or in influencing how the Trust operates.

    Despite the rhetoric/spin put forth by some Councillors/Trustees the electorate has in practice only minimal say in electing Trustees. Its all fine and well to say that the electorate elects the Trustees when they elect Councillors, the fact of the matter is, the electorate does it by default, not by informed choice, and in some cases they don’t realise they are doing so, and/or have a choice at all. When was the last time you recieved a Council candidate’s election communication, or were canvassed by a Council candidate that they stated what their policies were with regard to the CT, when did one ever state you would be electing them to the CT as well as the SIC for that matter. I rest my case.

    In practice the electorate elects Councillors, who by definition are elected on the basis that they are considered the most suitable candidate available to oversee the provision or local public services etc. It is only by default of the being the successful candidate, that they then are appointed a Trustee of an allegedly entirely seperate from the council local public fund, for which they are responsible for its maintenance, growth and disbursment of earnings in what is considered to be the fairest and most responsible manner.

    My own personal opinion, is that while the attributes considered desirable in a Councillor may well also be loosely similar to those required for the disbursment of public funds in a fair manner, it most certainly does not follow that the they are remotely appropriate to those required to make astute decisions that will be most likely to at the very least maintain, and hopefully grow an investment fund. In short, a Councillor is (or should be IMHO) selected on the basis of their talents in being able to most appropriately prioritise need, and deliver an adequate value for money service from the pot of money set on the table in front of them. A Trustee on the other hand should, again IMHO, be selected on the basis of their talents of understanding investments and being able to select the most astute choices from what is on offer at any one given time. While the two are certainly not mutually exclusive, to find any one individual who can perform both to a level of note is not easy.

    The CT is a difficult beast to tame, its two main roles do not sit well together. In an ideal world I’d prefer to see it run by two groups a Trustees, one group charged with its maintenance, investment and growth, the second charged with the distribution of income from it. On that basis the investment etc group should most definitely be elected specifically to the position, but while it might be no bad thing that the Trustees in charge of disbursment were also specifically elected too, given the similarities in the role with that of a Councillor, I could live with the status quo for disbursement. In all liklihood though, the best level of “reform” we can realistically hope for, is that it will remain as one group of Trustees, and they are elected specifically and solely to the position.


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