The National Trust for Scotland has come in for some stern criticism in recent months. A strategic review of the charity, carried out by George Reid, the former presiding officer of the Scottish Parliament, was scathing in its assessment of how the organisation was run.
Reid's report said the NTS was "not sustainable as presently organised" and hampered by "byzantine" governance structures. The charity, he added, needed a strategic plan because it lacked a "common purpose".
Reid also highlighted the large number of trustees - it has 87 in total - as a barrier to effective management of the organisation. "Its decision-making is largely gridlocked," the report said. "We have been unable to find any other charity with such inflated governance structures - we believe they prevent the trust tackling issues and setting strategic direction."
It was pretty damning stuff. But how did the NTS get itself into this predicament? Why does it have so many trustees and why are its governance structures so complex? And why did the charity develop in such a way that it prompted Reid to accuse it of lacking direction and advise it to sell some of its properties?
One former member of staff who worked in a senior role at the NTS says a number of factors have contributed to the organisation's problems. The ex-staff member, who agreed to speak on condition of anonymity, says one of the main difficulties is that the NTS's council - consisting of 87 members who are, in effect, trustees, though the Reid report said it was not clear who the NTS trustees were "in practice" - has failed to successfully delegate responsibility for the day-to-day running of the charity to the organisation's board, which consists of 10 non-executives and 4 staff directors. "The council should devolve decisions," the informant says, "but power remains with the council."
The separation of the roles of the NTS council and its board had been one of the key recommendations made in a review of the organisation's governance by Lord Mackay of Clashfern in 2003. As the Reid report noted, Mackay had "attempted to create a clear division between an executive role for the board and a policy role for the council". To this end, after the Mackay review the NTS board was "specifically entrusted" with the operational management of the trust, the Reid report said. But while the board was responsible for the charity's day-to-day operations in theory, the reality was somewhat different.
It seems that the council and the board had a poor working relationship, and one of the events that played a key role in inflaming the existing tensions between the two bodies was the decision - made in 2008 - to sell the charity's historic headquarters, Wemyss House. The Reid report concluded that the decision to sell the Edinburgh property had been made "without adequate consultation". As a result, this had "enraged" a number of representatives on the council and also upset many of the charity's members, who wanted to have their say on the matter.
The trust had bought Wemyss House in 1996 for £5m and then spent a further £7m of grant funding refurbishing the property. Wemyss was finally sold in 2010 for £8.7m so, as the Reid report highlighted, the cost of the refurbishment had not translated into "market value". A survey of more than 9,000 NTS members carried out as part of the Reid review revealed that many had "expressed sadness" about the sale of Wemyss House and said that decisions of this magnitude should in future be announced to members in advance so that they could make their views known.
The Reid report also acknowledged that the charity's management team struggled to keep the council abreast of important issues affecting the charity. "Senior management staff have a wide range of operational duties and are hard pressed to provide a steady flow of papers to inform debate," the report concluded. According to our informant, this led to the council being wary of endorsing decisions made by the board: "The council nitpicked - it was a case of 'we don't know what your decisions are, so we can't ratify them'."
The lack of a proper inventory of NTS assets was highlighted in the Reid report as another of the main issues facing the charity. According to the informant, this is partly a legacy of the trust's former management structure, which involved its portfolio being divided up into initially six, then five and subsequently four regions, with different management in each region: "If you asked people who worked for the NTS how many properties there were, you'd get different answers from different people."
The lack of a suitable inventory of the trust's assets is also explained by the fact that part of the property portfolio was acquired before the charity's systems were computerised, according to the informant. Even when IT systems were in place, the charity lacked the funding to meet the costs of staff needed to manage them.
Sizeable property portfolio
Another recommendation made in the report was that the trust should consider reducing its property portfolio. The former senior staff member says the need for the trust to sell off some of its properties has arisen because too many properties - some of which were of questionable historical value - were, in effect, foisted on the organisation with little accompanying financial support.
The properties were often acquired without a significant endowment, the informant says, and this - coupled with the fact that Scotland is a small country that doesn't generate significant visitor numbers or members for the NTS - means the trust has struggled: "The NTS was seen as a last resort. A multitude of properties were left to the trust in people's wills, despite not being hugely significant, because who else would look after them?"
A spokesman for the NTS says the charity is to conduct an audit of the 1,500 buildings and "scraps of land" it owns, as well as the 130 "significant historical properties" in its portfolio, to assess which are not of historical significance and can therefore be sold.
So why does the charity have so many trustees? The NTS spokesman says the charity's large council was "established in the trust's governing statutes" in 1935, but that the organisation's members were due to vote on proposals to reduce the number of trustees at the charity's AGM on 25 September.
Vital economic contribution
Despite the problems that are faced by the National Trust for Scotland, the informant says that the charity, as well as being responsible for the nation's "fantastic heritage", makes a vital contribution to Scotland's economy and cultural life and that extra funding should therefore come from the Scottish government.
The ex-employee says: "The NTS does a fantastic job - it provides employment in areas with high levels of worklessness and its volunteer base gives people something to do in areas where there isn't a lot to do. "But the Scottish government needs to take on a more financially supportive role."