Letters: David Wilkie / Stewart Ritchie and Nick Dumbreck (merger)

I am a fellow both of the Faculty and of the Institute. I have served on the Councils of both bodies, and been a vice-president of both bodies. I have given much support to the work of the Profession over many years. I have also supported closer co-operation of the Faculty and the Institute. I am, therefore, not a partisan of either body, and I have the interests of both at heart.

As far as the ordinary member is concerned, the Profession is already unified. There is one set of examinations, one journal, one set of conferences, one website, one disciplinary process, one CPD process, one way of getting practising certificates, one collection of subscriptions, which are at the same level. There are separate Sessional Meetings in London and in Edinburgh and occasionally elsewhere, each of which serves its local audience. There are separate Annual General Meetings and separate Council elections but these do not affect the ordinary member very much.

Many ordinary members might think that the present system does all that is needed. There is no obvious reason to change. No really substantive reason has been given for why there should be a change. The problem seems to lie entirely at Council level, or perhaps with the Secretariat, where those involved at the top level see two Councils as inconvenient, and possibly as obstructing good management. Suggestions have, therefore, been brought forward for a merger.

I am not opposed to good governance but in my view the present proposal is wholly unsatisfactory, and is very likely to fail, but only after a great deal of effort has been wasted on it. There is a significant group of members of the Faculty opposed to the present proposals. It is not yet clear how much opposition may arise within the Institute when the full nature of the proposals is understood.

The present proposals do not seem to say explicitly that the Faculty and the Institute will be wound up but the implication is there. The complexity of this does not seem to have been investigated. Neither Charter allows for winding up. Indeed, both bodies were created ‘with perpetual succession’, which seems to preclude winding up unless all members agree to it. It seems very likely that a minority on each side may be able to prevent the changes, whatever the vote, unless the vote had been overwhelming. We might end up with three actuarial bodies, not one. In those circumstances, the continuing bodies could probably stop NewProf obtaining a Royal Charter, just as the Actuaries Club prevented the Institute from getting one in the 19th Century. They might even be able to stop members of NewProf obtaining statutory recognition, on the grounds that there are two perfectly good bodies recognised for this already. This would be the worst sort of outcome.

A further consideration on the Faculty side is that we do not know whether or not Scotland will become independent in the future. The probability may be thought to be less than one half but it is by no means negligible. If it were to happen, Scotland would need an actuarial society just as Ireland has. The Faculty should be retained at least to cover this eventuality.

There are many other ways in which the apparent objectives of the proponents of merger could be achieved. The Faculty Task Force suggested some, and I am sure that members could suggest yet more, all of which would be worth consideration and public discussion before any vote is undertaken. There is no need to rush to do anything quickly, and widespread consideration and consultation is better than hasty and irrevocable decisions.

In order to help such consideration, we have set up a web forum where any actuary may express views at www.inqa.com/ActuariesOnTheMerger. All members (including students) of the Faculty and the Institute are welcome to register here. We would also be happy if the Faculty and the Institute were to set up a forum for discussion about the merger on the Profession’s website.

By the time this letter is published, I and other colleagues will have agreed on the details of at least three other alternative proposals that will be submitted to the presidents and Councils and posted on the forum. Please have a look at them and see whether you would support any of these alternatives.

David Wilkie
4 April 2008

Editor’s note: On receipt of Mr Wilkie’s letter, we were made aware that these issues had been raised as part of ongoing correspondence with the Profession. As such, the presidents of the Faculty and Institute have asked for the following comments to be published in respect of Mr Wilkie’s letter:

“Two principal reasons for the merger proposal are not addressed by Professor Wilkie’s letter: the external perception of the Profession as a whole and the risks associated with governance arrangements which the Institute sees as essentially undemocratic.

“The merger will bring two key advantages to members: it has the support of the majority of actuarial employers who expressed a view on the matter and a unified Profession will overcome the confusion surrounding our identity. A stable, unified Profession speaking with one voice will act as a positive trigger to allow the Profession to promote itself and its members in the new regulatory landscape.

“Professor Wilkie sees no reason to change the current governance arrangements, however, these arrangements are inherently unstable. They work only because of the continued co-operation of the two bodies through the construct of ‘Joint Councils’. They are viewed by the Institute as undemocratic because those in the Institute Council are in a position where their views can be vetoed by what the modern world may regard as a largely unelected group, representing only 15% of the membership.

“We refute Professor Wilkie’s comment that the decision to propose a merger to the membership was a hasty one. The Profession has been working towards it for the past 10 years and it has been actively considered for almost a year and a half since it was raised by Stewart Ritchie in his presidential address. Faculty members were consulted and, of those who responded, two-thirds were, subject to caveats, in favour of a merger. The issues were examined by a Faculty Task Force, then by Faculty Council and a joint task force of the Faculty and the Institute before a debate of Joint Councils was held.

“We have taken legal advice and consulted with experts on the question of the Charter. We will use one of the existing Charters, probably the Faculty’s, as the basis of the Charter for a new Profession but its substance will be new. This will ease the Privy Council’s approval process. The other Charter will be wound up as part of the final vote.

“As to the question of Scottish independence, we are confident that the new structure will remain robust in those circumstances.

“We appreciate the standing that Professor Wilkie has within the Profession but find it surprising that as an advocate of joint working he does not see any of the advantages that we do in taking the next logical step toward a formal union of the Faculty and the Institute.

“Professor Wilkie also fails to explain why he thinks that there should continue to be two UK bodies. The merger offers us all an opportunity to address the future of the Profession rather than looking to the past.”

Stewart Ritchie and Nick Dumbreck
1 April 2008