Personal Finance Society (PFS) president Caroline Stuart has resigned following the accusations of governance failures at the body by its parent, the Chartered Insurance Institute (CII) Group.
In December the CII decided to appoint a majority of directors to the PFS Board due to “serious and significant governance failures”, accusations that the PFS denies.
The CII stated last month that substantial and major governance failings had occurred, leaving the CII with little choice but to take this action.
The PFS responded yesterday denying the governance failings: “We note that the comments made about governance failures and other failings by the PFS Board are not true, and not supported by any documentary evidence.”
In response the CII has reiterated that the governance issues raised in its earlier statement are not without validity or foundation.
CII Group chair Helen Phillips says: “This is good business practice and was discussed in detail at the organisation’s recent AGM, along with the need to establish a new recharge model that fairly reflects the costs of delivering PFS member services, which is recognised by both Alan Vallance, CII Group Chief Executive, and Don MacIntyre, interim PFS CEO. There has been no change in that position since the AGM.
“The decision to appoint further Institute directors to the PFS Board was not an outcome the CII group board wanted or pursued, particularly during the festive holidays. However, after significant governance failings were repeatedly raised with the PFS, the CII group board was sadly left with no choice but to address these failings and take this action after its December board meeting.
Phillips added that the decision was in line with the broad responsibilities that are granted by law to all corporate directors as well as the PFS articles of association.
In 2021, the PFS president at the time, Sarah Lord, criticised the CII board in 2021 for its “ambiguous communication” during the Institute’s attempts to deregister the industry body, which would have resulted in the PFS losing its status as a separate legal entity with a board of directors and financial autonomy. The PFS rejected the CII’s attempt to deregister it in 2021 because it did not offer any proof of the benefits to members.
Syndaxi Financial Planning director Robert Reid says: “It has been clear that the CII has wanted to take control for some time. There was a failed attempt when Sian Fisher was CEO of the CII, and the body has now used governance breaches as a rod to beat them with.
“There is a complete absence of detail as to what these alleged governance breaches are. We have both sides briefing against each other and the fear is that the average member will just switch off.”
