West Somerset Railway - Removal of the PLC Chairman and related matters

I agree and suspect at least some of their problems, including the relatively poor fundraising success compared to other railways, stems from the WSR structure led by a plc which is formally accountable only to its shareholders, as if it was an ordinary commercial company. But it isn’t an ordinary company, because its business depends upon voluntary labour, voluntary donations and a lease on favourable terms from the County Council.

Informal cooperation, which may work very well most of the time, seems to break down far too easily when there is a dispute or misunderstanding. Not to mention a worryingly rapid turnover of plc directors and chairmen. Formalised (and non-executive) representation on the plc board of all the main WSR stakeholders might be one way to help address this.

 

Re your first paragraph, the West Somerset situation is broadly similar to the Severn Valley which has had remarkable success in fund raising. The only organisational difference is that the SVR’s charitable function and membership/volunteer functions are in two separate ‘subsidiary’ organisations, each of which can focus wholly on that activity. Yes the SVR PLC is technically responsible only to the shareholders, but it is 20% owned by the member’s organisation and 80% by private shareholders most of whom, like myself, are probably also members. It doesn’t cause an issue at the SVR, and I don’t think it would even if we leased the trackbed rather than owning it.

A clearly defined and agreed understanding of the respective roles of the organisations has to be the first priority. Otherwise I totally agree with your second paragraph – as mentioned previously the SVR has formalised cross-board representation between the three organisations. I note the comment from @Bean-counter 'Unfortunately, there are greater problems within Company Law with a Director of one Company being the representative of another Company - which only truly 'don't matter' if one Company is wholly owned by another.’ They begin to matter where there is potential for a conflict of interest, and if the organisations are part of ‘one railway’ working to a common goal then it is hard to see how such a conflict could arise.

 

Indeed, if they are truly aligned, the need for conflict is unlikely to arise. But the SVR appears to have considered how to structure itself so that the tensions between organisations are creative, something that the structure in West Somerset seems not to have achieved.

All of which comes back to the point that the railway is greater than the individual people and organisations looking after it, who are merely its custodians. A lesson, sadly, seemingly still insufficiently well understood by some.


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Very much agree - ironically, it is the Charity Commissioners who made quite an issue of this. Strictly, under Company Law, the Directors of any Company's main duty is to look after the interest of Shareholders of that Company (there are other duties to employees and wider society introduced or reinforced in Companies Act 2006 and widely ignored ever since!). This could lead to conflict of interest for 'representative' Directors where there are Shareholders other than the Company/Charity being represented - for example in a preserved railway's case, if there were moves to restrict the benefits received by these other Shareholders or if there were pressure to operate in a less profitable but perhaps more historically authentic manner, these could be seen as contrary to the other shareholders' interests but in practice are probably not going to be, given the likely motivation of those Shareholders in making their share purchase.

Plenty of commonality between Shareholders, Members and Volunteers seems a good way of ensuring commonality of objective and focus. Common Board Memberships can also help but can also arguably put too much authority in the hands of the common members. If there are clear strategies and objectives, it could be argued that there is no need for full Board Memberships as long as communication is clear and frequent.

In a West Somerset Railway context, I would suggest that it is crucial for the WSRplc to gain 'buy in' to the forthcoming recovery plans from volunteers (totally essential) and WSRA Members (this could seem irrelevant to the WSRplc Board but the WSRA Board needs to make a case as to how helpful they and their membership could be in the present circumstances, based on what works well 'elsewhere'). Hence, it could be said now is a key moment in making these relationships work to the benefit of the wider West Somerset Railway.

Steven

 

I believe the present crisis is more due to tensions between individuals than the organisations. Hence my previously announced intention to vote against the re-election of certain PLC board members.

 

I for one welcome JJP as Chairman of the PLC. Ian Coleby may be re-instated as Vice Chair in due course, he really has the soul of the line at heart but his statement about making possible staff cuts probably caused tremors throughout the staff, many of whom are ex volunteers.

JJP is in the fortunate position of being un-intimidated by the Association.

 

If things aren't working, staff cuts may be inevitable, whoever is chairman - there's no point avoiding the issue, and it is the PLC 's performance that is under scrutiny here. They know they're not doing well enough, I'm sure they don't need the WSRA to tell them that! I'm also bewildered as to why the fact that some staff are ex-volunteers is relevant.

I think there needs to be a real change in approach at the WSR - someone has pointed out that seven visiting engines were running at the gala. Although some were long term visitors, the cost of bringing 3 0r 4 for the event must be eye watering and I'ds certainly question whether the additional revenue generated recouped the cost of the event. Popular though the WSR galas are it has to be questioned whether they cotribute to the profit or loss half of the balance sheet.

 

What makes you think that the WSR PLC is intimidated by the WSRA? I can only think that you still believe that the two organisations are at loggerheads as they were in the sad days of the EX6 +1. AFAIK that simply is not the case today.

 

In my personal experience (in general, not with railways), when a company's financial performance is not as good as hoped, and new voices are brought onto the board to turn the situation around, then if anything the staff should be more worried, not less.

 

Spot on. In the simplest terms, when income and expenditure start to converge, there are two things a company can do. Increase income, and decrease expenditure. Reducing the wages bill is generally the quickest way to decrease expenditure. Increasing income by the same figure is far more difficult.
Robin L.

 

Fair comment, although it seemed to work for the Diesel Gala.
I know that the visitors on that occasion arrived in convoy on the mainline.
I would be interested to know what the cost would have been if 73082 had arrived for this gala on a low loader rather than being towed down the mainline.

Stef.

 

Same cost to the WSR as I understand.

Tom

 

There are one off costs to redundancy. The formula is easily found on Google.

The hard bit is selecting staff for redundancy being fair to the employee, the business and complying with regulations.

First in first out may be easy to justify but may remove excellent key staff.

Offering voluntary redundancy with the employer having the final say as to whether they will let the employee go via redundancy is about the least worst method.

 

Dare I ask at what net cost to railway preservation in general?


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Whether or not any event is well patronized, it does not follow that a high footfall equals profits - as many High Street retailers are finding out.

 

A road move by a regular haulier will cost approx £1500 per single move. Loco and tender is 2 moves.
If done as part of a chain of moves then there may be some reduction.

 

I think you are getting a good price there, Bryan! I would have said quite a bit more now - a price a bit more than that was seen as a good one a few years back!

The 'Mega-Galas' which were probably pioneered by the West Somerset have set a 'bar' that it costs railways dear to try and emulate - and I heard rumblings that, because of all the costs, even some then very high up in the West Somerset had doubts about the actual profitability of such events a good decade ago!

One or two visitors, if the right ones, can make for a perfectly successful event. 3 or 4 and you have probably £40k sunk in haulage and hire before you start. If any of those guests would be getting regular, daily use at their home base around the time of the Gala, then they probably lose money by attending due to the days lost in preparation, movement and putting back into traffic and the hauliers are probably on a very keen price, so potentially everyone loses! If the Camelot people have paid the extra for a rail move, I suspect they have ended up subsidising the West Somerset Gala, which is very good of them!

I realise saying this won't be popular but that doesn't make it any less true - this sense that ALL Galas must have lots of guests is actually at risk of killing Galas off altogether, or at least reducing the number held in a believe that 'one big event a year is more manageable than 2 with less guests' - yet such an approach increases the sense of 'all eggs in one basket' and being at the mercy of the weather or other national events.

Steven

 

We paid that figure 6 months back for a move from the Midlands to Newbridge.

 

When looking at the profitability of a gala, I do wonder whether people take into account the expected income that would have come in if it had been a normal operating day? Spending £40K on a gala basically means that you have to take an extra £40K over and above just to break even and probably an extra £60K to make it worthwhile. I'm also sure that no account is taken of all the extra volunteer and paid staff man hours thart galas entail. I also know that galas also have an effect on the weeks before and after the event as some be visitors avoid them in preference to visiting for the gala. The same goes for volunteers.