North Yorkshire Moors Railway General Discussion

Looks like I may have to retrieve the voting papers from the green filing cabinet outside before collection day .
The same one all the yellow begging forms get filed in ,whilst they actively discouraging enthusiasts to travel .

 

To be honest I'm encouraged by the extent to which we agree! The only serious difference appears to be whether a Nominations Committee should recommend candidates or select from a larger group that put their names forward. In practice I'm not sure the effect is materially different. A process of recommendation inevitably involves a recommendation that some are NOT elected which is pretty close to selection.
I also agree that it's important to have candidates who are going to be robust in debate rather than fit any particular "mould". Actually that's one of the important qualities the Nominations Committee looked for. It also took into account expectations that boards will be suitably diverse, an aspect that can be challenging given the composition of most heritage railways' membership.
As to the West Somerset experience it depends which one you have in mind. I couldn't help but reflect that if it was the attempt to supplement the board of one of the support charities with 1o additional Trustees in order to secure a merger with another charity, contrary to the wishes of both its incumbent Trustees and established membership, then a Nominations Committee could have avoided a great deal of pain and damage.

 

I think our analyses of west Somerset events differ! My observation is merely that the election you refer to arose out of a deeper situation in which the incentive to use insurgent tactics was strong.

I write and manage contracts for a living; I always have in mind what might happen if something goes wrong. These articles mean that going wrong will be more, not less, difficult to fix.


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Surely the wishes of the established membership were unknown until the election took place, and I seem to recall that the material which the incumbent trustees gave to the members to inform their votes in the election was not exactly unbiased. Whatever process the NYMR adopts for deciding who can stand, it must avoid any possibility that a closed shop could develop.

 

When I suggested to one of the leading protagonists that it was sharp practice to encourage large numbers of additional members, then rely on them to elect additional Trustees so the charity could be merged with another , and combined shareholding used to effect change in another entity, the observation was that "the end justified the means". Maybe, but surely the point is that a Nominations Committee, with responsibility for selecting Trustee candidates, would have avoided all the bitterness, frustration and disruption needlessly incurred?

Yes, boards must not be a closed shop. They should be refreshed regularly, be diverse and be effective. So far the experience of a Nominations Committee on the NYMR had generated far more applicants from a wide range of backgrounds and experience. That's in stark contrast with the previous system where vacancies could sometimes exceed the number of candidates with board members taking on the role of directing an £8million business without any input at all from the membership.

 

Presumably the Nominations Committee would be nominated by the current board (I haven't seen anyone suggest another method being proposed).
That being the case and to flip back to the WSR analogy, the current board of the WSR, could by virtue of appointing the committee, ensure that no 'trouble makers/outsiders/reformers' could be elected. Very much a self perpetuating closed shop.

 

Not really. Ultimately company law provides that if there is a sufficient number of disatisfied shareholders they can table a resolution at a General Meeting to remove one or more directors by a simple majority vote. Any Nominations Committee should be given clear terms of reference and ideally include independent members. If the auditors are doing their job properly they should also be verifying that the board and its committee are avoiding any closed shop risk.

 

Exactly the point some on the NYMR Forum and here have been making. Interestingly, half of the selected candidates appear to be relative newcomers to the railway and seem to have little involvement with it. Although they possess an imposing array of talents, do they really have to be trustees for those talents to be made available to the railway?

I'm amazed that the charity commissioners aren't deeply concerned by the disenfranchisement of the membership and the ORR 's concerns must surely lie with the professional management of the railway, which lies with the the PLC officials and is mostly outside the remit of the Trust Board. It is also interesting to note that the Articles are being changed to allow more "heritage" grant money to be sought at a time when the NYMR is becoming less like a heritage railway by the day!

 

Very. very difficult, though, as we've seen at the WSR if only because of the postal costs involved, and because off difficulties getting details of members to send information to. And auditers normally only do what they are asked to do!

 

Please explain how that could have possibly worked in the case of the WSR? Reformers have no access to mailing lists and cannot contact shareholders to garner their support. I think it was previously mentioned that the PLC had to approve any motion at the AGM and would not entertain questions under AOB.

You say that a committee should be given clear terms of reference and ideally include independent members - but what if that doesn't happen? What recourse do the members have?
Regarding auditing - what sort of auditing did you have in mind - financial? I'm not sure how that would fit with a nomination process. And what if the auditors are also friends of board members? What power would an auditor have anyway?

There seems to be a lot more complication and obscurity with what you are suggesting. I can see volunteers walking when they start to feel that 'their' railway no longer belongs to the volunteers

 

If the auditors are doing their job properly that's just untrue.

Any member has the right to inspect the shareholders register for a "proper purpose". The directors may not like it but they cannot refuse if its a genuine attempt to garner shareholder support. They can also be required in certain circumstances to distribute a shareholders resolution to be voted on at a General Meeting.

The usual problem is that there is a disgruntled minority but the rest are either content or don't care

 

Sorry. I hadn't seen your post before replying . Hopefully it provides some answers. As suggested there are circumstances where Members can table a resolution to be voted on at a General Meeting. What they can't do is spring something unannounced under AOB. The only business that can be transacted at a General Meeting is that for which due notice has been given to the members/shareholders so the Directors would be right not to allow other items items to be introduced on the day. However the Company can't veto any properly tabled members' resolution for which due notice has been given

Auditors examine and report on far more than just the finances. Good corporate governance is something they should be verifying.

Whatever volunteers believe should be the case if the railway is an incorporated entity ( a company or incorporated charity ) it belongs to its members/ shareholders but they usually have no right to any share of its assets. It's not unusual for them to expect that it should be run for their benefit as volunteers or heritage preservationists whereas the duties of the directors under company and charity law can be very different. It's a difficult tightrope to walk because without volunteer support the company or charity may be unable to deliver against its objectives.

 

I think there is confusion and possibly elision between “for members benefit” and “on members behalf”. Where I am a member, I expect the directors and trustees to manage that organisation on behalf of us all - and when it is a charity, that is part of the “trust” in “trustee”.

There is no serious question about whether trustees should run the organisation in accordance with its legal purposes and the wider law. The problem is about how they are accountable for their discharge of that duty to the membership.

In Somerset, we have seen issues arising where that accountability has been avoided, and where legitimate stakeholders interests have been ignored. Whether that was lawful (as it sadly has been by the plc) or not (much of the WSRA nonsense a few years back) is secondary.

Auditors, Charity Commission, grant providers, etc provide important checks and balances. But if the board are fundamentally unaccountable to the members, because members face intolerably high thresholds to act, that sets the organisation up for failure.

And that is where I find the new Articles fail, because they create the circumstances in which a bad faith actor could retain control, with the members having little or no recourse short of the nuclear option.


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I could happily agree with "on behalf of" but that can mean different things to different people.

So let's test it with a couple of topical examples. Assume that there's compelling evidence that a substantial majority of the members (especially the volunteers) want to continue with the railway's wartime re-enactment event despite the current crisis in Ukraine. The Directors/Trustees believe that to do so would risk reputational damage and imperil their application for a substantial grant. What does deciding on behalf" mean in that context?

Another one. Members. especially the volunteers . would like to see lots of trains operating without the need for pre booking so they can hop on and off as they have always enjoyed doing in the past. The Directors/Trustees look at the cost and revenue forecasts and conclude that to generate enough surplus to see them through next winter they need to run fewer fully pre-booked trains. What decision should they make "on behalf of " the members?

Answers on a post card please!

 

There is no adequate answer to either of those questions, and I do not propose a referendum to be a right way to resolve them. Ultimately, in the NYMR structure, the plc management working with the Trust need to look at those - and myriad other - decisions in the round. While attention may focus on certain specific decisions, their accountability to the members needs to be in the round for the care of the members' asset.

Some of those decisions will provoke immediate emotion and have limited carry over; others will be more fundamental. As a member, I accept the authority of the trustees to make the decisions that they have made, based on the analysis that they have performed and their knowledge of the business. While I would hope for engagement through the year, and I know that you personally are committed to transparency, the ultimate forum for that accountability will be at the AGM.

My issue is that the power of this accountability is diluted to homeopathic levels if the trustees hold a veto over whether someone challenging their approach may even stand in opposition to them. If they have lost the confidence of the members, then the election of a dissenting member is an important corrective. And if that dissent is noisy but limited, being able to defeat the dissenter in a free and fair election is an important demonstration of where the membership's balance of opinion lies.

You will notice, that although I am not a fan of the pre-book model, and feel NYMR has and continues to pay insufficient focus to heritage, I have not focused on the policies of the Trust and Trustees. That is deliberate; I would oppose Articles containing Clause 19.3 if the Trust were otherwise wholly aligned with my thinking and completely heritage minded. The issue is that provision, and what it could and I fear will mean to the NYMR. By proposing it, I am being asked to place trust not just in the existing board and those who will shortly be elected, but in the goodwill and fair conduct of all their successors. I simply do not think that this is a fair question to have asked.

 

Here's my postcard. You have posed two simplistic questions for which there aren't simplistic answers, but in the first one, in a functional environment, with the event some months away, surely there i sufficient time to canvas opinion as widely as possible before making a decision and jumping on the Cancel Culture bandwagon and cancelling the event. It's not one I would bother to go to but it gives a lot of enjoyment to a lot of people. It would be interesting to hear who was consulted before the decision was taken.

Secondly we know from past experience that visitors can get very disappointed when things do not go as expected and bad news travels much faster by word of mouth than good news ever does. Had it been my choice I would have made Whitby services fully pre-booked but Grosmont-Pickering rather less so ad minimise the risk of people walking away. An engine has to be steam normally so the train can run if required, so most of the costs are already incurred leaving just the potential ill-will to fester and breed.

 

Sorry John, but that last paragraph doesn't hold water. Apart from changing peak time Friday & Saturday services from a Gold to a Bronze T/T and a recast of the Sunday T/T, they are running just as many trains as they have for the last few years so I'm not sure how you can argue that restricting services to pre-booking will maximise revenue whilst reducing costs. The same number of locos are going to be steamed each day and the same number of coaches dragged around. The only opertional saving is the substitution of a diesel loco for a steam loco on 30 days of the Gold T/T. If you said that services to Whitby had to be pre-booked to restrict passenger numbers and avoid overcrowding that might be a valid argument but that is not what you are saying. If you artificially restrict passenger numbers by making turn up on the day inconvenient then you are restricting potential income. I can't for the life of me see why the lunch time departure from Whitby on Bronze is no longer available for Joe Public and is ECS to Grosmont so that, if the 10.00 isn't suitable for you, you can't have a ride on the railway out of Whitby. The limited number of people using that service are using a service that is going against the traffic flow so surely needs encouraging, especially if the 10.00 isn't loaded to capacity. Surely the critical thing is to limit the number of tickets sold at Whitby each day so that there is a seat for everyone of the 15.00 ex Pickering and not worry about which train they go out on.
The NYMR is rapidly losing my confidence and enthusiasm.

 

Thanks but you didn't really address the question of what it means to make decisions "on behalf of "

The answer is that Trustees /directors of a company are under a legal duty decide what is in its best interests, especially those of its shareholders. The Trustees of a charity are under a similar duty to ensure, so far as possible, its financial viability and achievement of its charitable purposes.

What may people find surprising, including some Directors and Trustees, that even if the members/shareholders have indicated that Directors/Trustees should act on in a particular way, the Directors/Trustees duties take precedence. If they reasonably believe that that member/shareholder instructions, including a majority vote, are not in the best interest of the company or charity they are duty bound to ignore them.

That's why I wanted to tease out what people believe deciding "on behalf of" means in practice.

 

I find it hard to conceive of circumstances where the duties are so far at variance that a board could not act in accordance with the expressed wishes of their members, provided that they advise the owners of the risks associated with that position. What they do not allow for is the possibility that there might be alternative, less optimal, courses of action that could also ensure that the railway remains a going concern. So, taking the pre-booking scenario, the members might legitimately form a view that the opportunity of additional revenue is sufficiently plausible as to justify seeking the trustees to operate a timetable capable of turn up and go, and that the risks associated with the extra costs should be met by cost cutting elsewhere. If ordinary commercial choices like these have got to the point where they are effectively confidence votes, then a number of far more serious things have gone wrong.

 

You seem to suggest that within those legal duties there is little or no scope for deviation, or different strategies. Not every decision a board makes will be of such consequence that it could potentially affect the viability of the company. For example, a policy to have each station "themed" in a particular time period might reasonably be something that be emanated from a Trust board, but no sensible person could say that whether a particular station was painted in BR or LNER colours would affect the viability of the company.
Nevertheless, it may well become a subject of some contention, the board dig their heels on on one side, while the majority of the membership prefer the other. Someone may step up and decide to stand for office, to represent this view at board level. The existing board dead against this point of view deny him or her even the opportunity to stand for election, with no higher motive than because they think their opinion is "right".