Councillors have given unanimous backing to a motion saying there should be no councillors sitting on the Shetland Charitable Trust.
Wednesday’s full council meeting discussed trust reform after being the SIC was asked for its views on proposed changes to the SCT board of trustees.
Following lengthy discussions, members agreed to recommend that there should be no councillor trustees.
Charitable trust vice-chairman Jonathan Wills abstained from the vote but told councillors he had been asked to resign as vice-chairman from the trust (see panel below).
Dr Wills has been calling for directly elected trustees to address what he has called the “appointocracy” proposed by the SCT.
The motion also noted that the trust should consider how it engages with its beneficiaries and it should not discount the idea of electing trustees.
Councillors were asked to chew over the trust’s reform proposal – shifting from seven councillor trusteess to four, with 11 appointed trustees overseeing the £224 million of trust investments.
Presenting a report in the council chamber, SIC chief executive Mark Boden said: “This was a review they [the trust] carried out under their own initiative and came up with their own proposals”.
SIC leader Gary Robinson had previously said, according to local government accounting advice, having more than two councillor trustees would mean grouping SIC and trust accounts, adding further to a view that the council had a controlling interest.
Mr Boden said there was a close relationship between the trust and the council which would remain with or without councillor trustees.
Councillors highlighted difficulties including conflicts of interest and the perception that councillor trustees were seen as influencing the trust. It is incumbent on all trustees to act in the trust’s best interest.
Vaila Wishart said: “I don’t see any benefit for any councillors being on the charitable trust. I see a number of disbenefits and I think there should be clear blue water between the council and the charitable trust.
“We have, as the chief executive said, ways of working together through the Shetland Partnership, which brings all the groups together.
“I think that’s adequate because the conflicts of interest which have been raised during the past few years, where the number of trustees has gone down and down, have not been resolved.”
Alastair Cooper seconded the motion and said he was concerned about the perception of the councillor trustees.
Having no councillors on the trust would remove the impression that the council was “the driving body”. He said there should be a close rapport at officer level between the trust and the council
Allan Wishart wondered if there would be some benefit of retaining councillors on the trust.
“Councillors generally have a much wider view of Shetland, maybe social aspect and difficulties. I would like to think two councillor trustees would bring some knowledge to the trust in its decisions,” he said.
Mr Wishart said he hoped a rapport could continue, but “people fall out” and was concerned links could be lost.
“We have to recognise that these are the two most important bodies in Shetland, for the good of Shetland,” he said.
The conflict of interest was a real problem, added Mr Wishart and “it means that the councillor trustees are really not much use to the trust or the council.”
Political leader Gary Robinson felt there had been a mistaken belief that councillors were appointed to the trust to act as a conduit between the two organisations.
Councillor trustees must not act in the interest of the council, rather the interest of the trust, he stressed.
Mr Robinson repeated his view that there needed to be “clear blue water” between the council and the charitable trust but added there had to be something “to fill the gap”.
There should be distance in terms of governance, he said, but still a business relationship between the bodies.
Mr Robinson also argued the trust could engage more with the community.
Such concerns had been flagged up by the public, with the trust being like The A-Team – “they will help you out if you can find them”, he said.
He further called for the motion to include the possibility of elected trustees.
Afterwards charitable trust chairman Bobby Hunter said he was disappointed with the council’s decision.
“I think it’s essential that the trust and the council work together and have the same agenda as far as possible.
“Obviously we will have to wait for formal notification from the council,” said Mr Hunter before the matter was discussed by the trust.
Chairman of the SCT audit and governance committee, Keith Massey, said: “We had obviously hoped that Shetland Islands Council would be keen to continue to appoint councillors, albeit a reduced number, to the trust.
“We will now take stock of their decision and discuss its implications for the trust’s governance reform.”
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‘You’ll have a trust that has been de-facto privatised’
Jonathan Wills told councillors he had been asked to resign as vice-chairman of the trust by chairman Bobby Hunter and fellow councillor trustee Drew Ratter as he could not be an office bearer of the trust and argue against trust policy.
However, Dr Wills said he had refused to resign because the trust had not debated or voted on his alternative proposal and had not done so in public.
He praised the appointed trustees, but warned the “democratic deficit” would become absolutely critical if the council went with no councillors and “you’ll have a trust that has been de-facto privatised”.
Citing a phrase used by Nicola Sturgeon, Dr Wills said if the council opted for no trustees it would mean a material change of circumstances, giving the trust “a legitimate reason to reconsider and hopefully have a public, honest discussion about proposals.”
Trust chairman Bobby Hunter said he did not want to comment about Dr Wills being asked to resign as vice-chairman.