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Railway Organisational Structures

Discussion in 'Heritage Railways & Centres in the UK' started by Monkey Magic, Sep 27, 2020.

  1. Jamessquared

    Jamessquared Nat Pres stalwart

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    We have essentially a tri-partite structure of Society, Company and Trust. The effect of that structure is that basically the Society defines the long term vision and strategy for the railway; the company delivers that vision and strategy to the best of its abilities within its regulatory and financial constraints; and the Trust can provide funding, within its own constraints, where capital is required for building and restoration projects.

    In detail: The Society (BRPS) is a non-charitable membership body. It owns the majority (about 80% currently) of the shares in the plc. Membership of the society comes with certain privileges, such as travel and shop discounts. The primary output of the Society is the Long Term Plan, which defines what sort of railway we wish to be. The role of the plc is then to operate the railway and deliver, within regulatory and financial constraints, the wishes of the membership of the BRPS as expressed through the long term plan. The Society's main income is from subscriptions; because it has minimal fixed outgoings (no paid staff, no premises), the majority of that income is available to be invested into the plc, which is achieved by loaning it money and periodically converting those loans into shares. The Society rules require that the Society always maintains a majority shareholding in the plc.

    The PLC is the railway operator. It owns all the land, the infrastructure, buildings, most of the rolling stock, about twenty locos, and in a legal sense holds the licence to operate the railway. All paid staff on the railway are employees of the plc. (The one exception to all operational matters being run by the plc is the Museum, control of which ultimately goes up to the Bluebell Railway Trust). In principal, the plc can issue shares as a means of fundraising, and in the past this was done (which is why the BRPS is a majority, but not outright, shareholder). However, the last such share issue was ca. 2007 for the northern extension. The regulatory constraints on raising capital that way are very onerous, and these days all major appeals are routed via the Bluebell Railway Trust.

    The Bluebell Railway Trust is an independent Charity, which raises money for its charitable objectives. It owns two locos (the Wainwright H class and C class); has a minority stake in a third; and I believe owns the four-wheeled carriages on the railway, both operational and grounded bodies. It also has no paid staff (though it sponsors the workshop apprentices) and no premises, so in practical terms, about 99% of the money raised each year is available to be spent on those charitable objectives. The Trust is not a membership body; it is governed by a board of Governors.

    Volunteers on the railway are subject to the Safety Management System and therefore in a formal line management sense are under plc line management; however, you must be a Society member in order to volunteer.

    The BRPS rules require that the plc directors "maintain the confidence of the society" or some such wording. That used to be achieved by Society Trustees being the directors of the plc. However, over the last ten years or so we have gradually moved away from that in favour of having directors with specific technical skills and accountability for specific roles (loco, C&W, infrastructure, operations, finance etc). Because the Society maintains a majority shareholding, any candidate director who did not have the confidence of the society would not be voted on at the plc AGM. Thus there are relatively few cross-board directors now, but the following specifically exist:

    (1) The BRPS Chairman is a director of the plc
    (2) The BRPS Chairman is a governor of the Trust
    (3) The membership of the BRPS additionally elect a "Society representative to the Trust" from within the membership. This person is a full governor; the election is part of the business of the Society AGM.

    There are a number of other groups on the railway. In many cases (such as the Station Friends' Groups; the Fenchurch Fund; the Atlantic Project etc) they are simply groupings (for fundraising and / or maintenance or overhaul purposes) within the overall railway, and have no separate legal existence. In a few cases (notably the Maunsell Locomotive Society; the Bulleid Society; the Camelot Society and the Howlden Trust) they are legally distinct entities, though obviously very intimately bound up with the railway and presumably with a degree of shared membership with the BRPS.

    Our structure has developed over the years; in particular, I think the separation into a company that was majority owned by the Society arose from a turbulent period in the railway's history almost fifty years ago that arose, as I understand, from a not uncommon tension: who ran the railway, company or members? A plc structure arose because that was seen as a way to raise capital - the charitable Trust route for funding did not exist at the time, that body having grown in importance in our structure in more recent times, particularly the last ten years.

    There have been, and are still planned, some minor evolutionary tweaks to that structure, but they don't fundamentally change the model: they are primarily concerned with removing the risk of the members of the Society and the Trust Governors / Society Trustees being potentially liable to large uninsured costs in the result of a disaster of some kind (a point that was discussed on the WSR thread).

    Would we do it the same again? Possibly not now, there are different legal vehicles available now that weren't available in the 1960s/1970s. That said, I think there is a benefit (à propos the discussion on the WSR thread) about our controlling body (i.e. the BRPS membership body) not being charitable, because it makes the ability of the Society to invest in the company much easier, which is the means by which the membership have control of their railway. The possible disbenefit relative to those railways (such as the IoWSR) that have a charitable membership body as the railway's operator is that it means we can't take advantage of the possibilities of Gift Aid on fares.

    That's my understanding of the structure.

    Tom
     
    jnc, Hampshire Unit, crantock and 5 others like this.

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