The dispute about reforming the governance of the Royal Albert Hall seems likely to come to a head soon. An internal review of its constitution is nearly complete and the Charity Commission is poised to act if it considers the outcome unsatisfactory. It’s about time: it’s being going on for nearly nine years.
There are many legal complexities, but at heart it’s a simple matter. The charity is governed by a council of 24, 19 of whom are elected from among some 350 people who own about a quarter of the 5,272 seats in the hall, the tickets for which they sometimes sell for inflated prices on the internet. The commission sees a risk that the council will prefer the interests of the seat-holders to those of the charity, and wants to see a non-seat-holder majority on the council. The hall is defending the seat-holder majority, apparently to the last ditch.
The latest salvo came last weekend when The Sunday Telegraph published a combative article by the hall’s president, Jon Moynihan, the former executive chair of PA Consulting who now runs a venture capital firm. He defended what he called the "idiosyncratic" governance of the hall, accused the commission of political correctness and "regulatory overreach", and warned against a council stuffed with "quangocrats". He even suggested that the fifth major concert hall mooted for London should follow the hall’s governance model.
The article was timed to appear just before the hall’s annual general meeting on 18 May, when the seat-holders will gather to conduct elections, approve the annual accounts and hear an update on the constitutional review. The commission wanted this to be completed by now, but the hall said the process was delayed because the commission refused permission for it to spend its charitable funds employing parliamentary agents to draw up a scheme to change the constitution, which is contained in acts of parliament. Presumably this was because the scheme the hall has in mind does not include the reforms the commission considers necessary.
It’s understandable that the commission is proceeding with caution. The last thing it needs is an expensive battle in court with a group of mostly wealthy people determined to defend their position. But the fact remains that the hall’s constitution – "archaic" might be a better description than "idiosyncratic" – does not conform with modern standards of charity governance. The commission should act soon, and as firmly as it does with minor charities with late accounts or errant trustees.
Moynihan’s article made much of the fact that the hall is a successful, world-famous venue that provides extensive public benefit. Patrons who invariably come away delighted would be astonished to hear that it is under pressure to change the way it is run, he argued. Yes, but those patrons mostly do not know that it is ultimately run by people who own a quarter of the seats and often make money from this investment: council members and parties related to them own a total of 141.
There is no evidence of wrongdoing, and seat-holders benefit the hall to the tune of some £5m a year, mainly by giving up their tickets for some of the best shows. But the set-up doesn’t look good, it’s wrong in principle and the commission is right to insist on reform, not least because experience shows that when charity scandals eventually blow up, they can usually be traced back to unremedied flaws in governance. Little can be done about the fact that the seat-holders own and trade their seats: these private property rights are a hangover from the way the building of the hall was financed in the 1860s. But the link between seat-holding and being in ultimate control of the hall can and should be broken.
Stephen Cook is contributing editor of Third Sector