2014 Annual Meeting

Page published 8 June 2014

Calm reigns at ECF Finance Council meeting

Report by Andrew Farthing, Editor of Chess Moves, previous ECF Chief Executive, and representative of the Midland Counties Chess Union, Worcestershire Chess Association and Worcester & District League (a typically hydra-headed attendee!)

Over the past several years, three things could reliably be said of ECF Council meetings: (1) the meeting would overrun its scheduled 6 p.m. finish; (2) important items appearing late on the agenda would be rushed through at breakneck speed; and (3) substantive debates would be sidetracked by more personal squabbles and bad feeling.

It is with some relief, therefore, to be able to report that at the latest Finance Council meeting on Saturday, 12th April the meeting finished 25 minutes early, the agenda was completed without undue haste and the participants by and large resisted the urge to rise to the bait of any contentious comments.  A large slice of the credit for this must be given to the meeting’s chairman, Mike Gunn, who steered a course through potentially choppy waters with calm authority.

Mike was helped in this endeavour by the Board’s decision not to debate the Chief Executive’s papers on Strategy and Transformation at the meeting but simply to use the occasion to open a consultation upon them, inviting written comments from members.  Similarly, the proposal to establish a chess charity and to transfer all but £1,000 of the Permanent Invested Fund to it was withdrawn and replaced by a holding motion to extend the current trust deed for a further two years while consultations were heard.  More on these matters later.

Outstanding business from the AGM

In the past, discussion of matters arising from the previous meeting has sometimes been protracted.  On this occasion, the principal issue raised related to the vacancy in the role of President created by Andrew Paulson’s resignation.  Andrew Leadbetter proposed that the Board be instructed to appoint his predecessor, Roger Edwards to the role (seconded by Alex McFarlane).  The Board’s preference was to assess potential candidates for this and the vacant Non-Executive Director position created by Sean Hewitt’s resignation in accordance with due process and make an appointment only when this had been done.  After some debate, the proposal was defeated on a show of hands by 11-20.

Following this, Julie Denning read a brief statement from the Sussex Chess Association (SCA) concerning the archive of SCA papers which went missing while in the ECF’s care (as managers of the National Chess Library).  The statement expressed gratitude for the Chief Executive’s intervention in allowing access to a storage area not previously searched but added that the search had proved fruitless and, with deep regret, the archive is considered lost.  The SCA’s distress at this situation was entirely understandable and undoubtedly shared by all present, who must have appreciated the dignified statement accepting that all that could be done to find the missing documents had been done.  The loss of these historical documents is sad indeed.

ECF representation at the European Chess Union (ECU) General Assembly

Online discussions prior to Council had largely focused on the resignation of the ECF President and the agreement reached between him and the Board that a proposal be put to Council to the effect that Andrew Paulson be designated the ECF’s official delegate to the ECU General Assembly, at which he would be standing for election to the position of Deputy President (nominated by the ECF Board).

There was considerable anticipation to the effect that this could be a heated discussion, and it would be fair to say that many delegates’ minds were focused on it.  Sensibly, therefore, the relevant item was moved from 17th position on the agenda to early in the meeting.  Opening the discussion, the Board restated its sincerity in making the proposal.  The Federation’s FIDE Delegate, Nigel Short, responded by referring to the “unprecedented” proposal to disenfranchise the elected delegate.  He commented that passing the motion would, in practice, be a vote in favour of Zurab Azmaiparashvili for ECU President and noted that the deadline for nominations for the ECU roles was still several weeks away (9 May) and that it was inappropriate to decide upon the ECF’s voting intentions before all of the candidates were known.

The debate which followed remained civil and indeed rather subdued in tone.  One sensed that Ray Edwards spoke for many in the room in suggesting that the proposal to send Andrew Paulson as its delegate to the ECU General Assembly was difficult to reconcile with the Board’s having passed a vote of no confidence in its President.  The majority of speakers expressed concern over the proposal, creating the impression that the vote would result in its defeat.  Perhaps recognising this, in closing the debate, Andrew Paulson chose to concentrate on matters related to the confidence motion and the leaked draft agreement between himself and the FIDE President concerning the rights to the world championship and associated events, rather than make the case for being nominated delegate to the ECU General Assembly.

The proposal passed to a card vote without prior show of hands.  It was comfortably defeated: 79 votes in favour, 153 against, with 30 abstentions.

Financial matters

The core purpose of the Finance Council meeting, as opposed to the AGM, is to consider the ECF’s financial position and to agree the budget for the coming year, setting membership and game fee rates en route.

This year, thanks to the hard work of Chris Mattos, John Philpott and David Eustace (Director of Finance), comprehensive financial reports had been prepared and circulated in advance, which greatly aided efficient discussion and provided reassurance that the Board was on top of the numbers.

To summarise a plethora of information in a few short words:

• The ECF achieved a surplus of about £11,000 for the 16-month 2012/13 financial year;
• The current (2013/14) financial year is projected to achieve a surplus of £21,000, despite the fact that it includes the expense of both an Olympiad and a European Team Championships (normally, they would feature in alternate financial years);
• The 2014/15 budget produces a further surplus of £21,000, adding to the health of the ECF’s reserves.

Some one-off factors influenced the outcomes in 2012/13 and 2013/14:

The ECF benefitted in 2012/13 from receipt of £12,000 from the pension fund trustees of the late Martin Hawley.  It had been expected that more than half of this might have been required to cover the venue costs of the Riviera Centre for the 2013 British Championships in Torquay, but in the event, the entry to the championships was so good that none of the £7,500 earmarked to cover these costs was required.

In the current year, the departure of the ECF office manager and the covering of the vacated role by an official on an unpaid, voluntary basis created a better-than-expected performance on the cost side.   Council was told that this would not be repeated in 2014/15, as a new (paid) office manager would be recruited to restore the office staff to budgeted levels.

These one-off factors notwithstanding, the Director of Finance stated that the good financial results were in large part a reflection of the success of the membership scheme, which had stabilised the Federation’s finances after years of uneven performances and deficits.  This conclusion was echoed by the Chairman of the Finance Committee, among others.

Financial decisions taken

Moving to the meat of the agenda and the matters perhaps of most interest to members, Council decided the following:

• Individual members’ subscriptions are unchanged;
• The minimum membership fee for organisations is unchanged;
• Game Fee rates are unchanged;
• An additional £5,500 was made available in the current financial year to supplement the International Chess budget, in order to allow the strongest possible teams – Open and Women’s – to be sent to the 2014 Olympiad (in the event that funds raised from external sources fall short).

The decision to freeze Game Fee rates for a further year represented a rejection of a proposal initiated by the Hastings & St Leonards Chess Club to reduce rates for graded internal club games.  There was little support for this at the meeting (Sean Hewitt pointed out that only 54 people played only internal club games and that half of these were from Hastings & St Leonards), and the proposal was defeated by 9 votes to 29 on a show of hands.

The Game Fee decision also represented a rejection of the Board’s proposal of a 12.5% increase (i.e. for standard play, from £2.00 to £2.25 per result).   The Director of Finance stated openly that this increase had been proposed in order to encourage a still greater switch to individual ECF membership and that the additional monies raised were modest (less than £2,000).  My own comment at the meeting was that the increase was largely meaningless in its financial impact and too small to have a significant effect in accelerating the trend towards membership.  As such, it appeared to fall between two stools.

On this basis, the budget for 2014/15 was adopted with none against.

Looking further ahead

As well as a budget for 2014/15, the Director of Finance had prepared projections for the following two years, reflecting a number of different scenarios.  These centred on the policy with regard to support for the ECF’s international chess activities and its intended timetable for achievement of a reserves target of £100,000.

There was limited discussion of these scenarios.  In conjunction with the plans for the establishment of a chess charity and the transfer of monies currently held in the Permanent Invested Fund (within the British Chess Federation), I suggested to the Board that consideration be given to splitting the transfer so that sufficient monies were passed to the ECF to meet its reserves target at the earliest opportunity.  The rationale for this suggestion was that it would liberate the ECF from the need to budget surpluses for the next few years, allowing room for investment in activities to develop and support English chess.

As it was, by the time the Council meeting was briefly suspended to allow for an Extraordinary Meeting of the British Chess Federation (BCF), the proposal to set up a new charity had been qualified by the announcement that approval for the transfer of funds from the Permanent Invested Fund would not now be sought.  On this basis, it had been passed, since it was clear that without the switching of funds the establishment of a new charity was unobjectionable.

The BCF meeting was noteworthy for the fact that up-to-date financial statements had been provided for all of its constituent parts, a significant improvement on previous years.  A proposal to renew the Permanent Invested Fund until May 2035 was modified by the Board to a renewal until May 2016, to allow time for consultation over matters raised in the ECF Council paper on the establishment of a Charitable Incorporated Organisation.  As stated previously, the proposal to transfer all but £1,000 of the BCF Permanent Invested Fund monies to the new charity was withdrawn, so the status quo prevails for a couple more years.

Returning to the ECF Finance Council...

In advance of the meeting, Chief Executive Phil Ehr had prepared and circulated two papers for discussion and noting, on Strategy and ‘Transformation’.   In the event, attendees were told that the intention was now to open these up for consultation, and written comments over the coming weeks were invited (no deadline was specified).  The papers are still available on the ECF website at http://www.englishchess.org.uk/about-2/ecf-council-and-board/.

In brief, the Strategy paper proposes the following initiatives:

• Initiative 1: Improve financial management and office performance;

• Initiative 2: Compete in the Olympiad, European Team Championships and Youth Olympiad with the best teams that funds allow;

• Initiative 3: Correct shortfalls in secondary schools, women’s and seniors’ chess;

• Initiative 4a: Transform and improve governance to enable charity funding of charitable activities;

• Initiative 4b: Improve governance and transform to enable commercial practices and major sponsorship of English Chess;

• Initiative 4c. Transform and improve governance to enable access to funds dedicated to promoting sport.

There is more detail in the paper, which interested members are encouraged to read.  The final initiative reflects the assertion that the current ECF organisation is not “fit for purpose” and that a ‘transformation’ is required.  This is set out in the Transformation White Paper, which includes the following suggested measures (intended for discussion purposes only):

• Rebalance representation at Council among players, arbiters, organisers, coaches and reporters.
• Permit directors and managers to be paid as a means to recruit and manage relationships with corporate sponsors and to raise standards for delivery of ECF-run championships and member services.
• Increase terms of office for Board members.
• Require conflict of interest certification for candidate Board members. Use registered charity standards for directors designated as ex officio charity trustees. Use company standards for other directors. Consider extending conflict of interest certification for other officials involved with selection of players, coaches, arbiters and organisers.
• Merge the Awards Committee and the Personnel Committee in to a single Recognition Committee. Expand their combined task to include human resource support and oversight for paid staff and volunteers.
• Establish an Ethics Committee or expand the Governance Committee’s remit to include complaints.
• Maintain restrictions on the size of the Board but realign executive director responsibilities by function, such as below. Note in this structure the mutual support required, as distinct from the current structure that is sometimes regarded as three largely independent business units (home, international, junior) operating autonomously.
• President
• ambassador-at-large;
• Chief Executive (ex officio charity trustee)
• strategic and operational guidance, relations with higher echelon domestic bodies such as the All Party Parliamentary Group, Sport and Recreation Alliance, Sport England, British Olympic Association;
• Finance Director (ex officio charity trustee)
• budget and finance;
• Player Development Director
• training programmes and international selection of professional players, amateurs, youth, women, seniors, clubs, schools, prisoners, armed forces, veterans; and their supporting trainers and coaches; junior bursary fund;
• Education, Qualifications and Culture Director
• Laws of Chess, training and qualification for arbiters, trainers and coaches, general ECF policies, coordination with unions, congresses, independent associations, school associations, charities and chess variant bodies;
• International Affairs Director
• international delegate, FIDE commissions, coordination with other federations, BICC;
• Commercial Director (paid)
• sponsor and donor relations, all ECF-run and outsourced tournaments, Grand Prix, logistics planning for all events including training events, equipment, public communications, website, library, merchandise;
• Member Services Director (paid)
• grading, FIDE ratings and titles, future anti-cheating services, community calendar, official travel for teams, awards, personnel, content for the yearbook and newsletters, office management, complaints management, membership drive;
• Two Non-executive Directors
• at least one from outside the chess community.

All ECF member organisations and individual members are invited to provide comments on these papers, which should be directed to the ECF office for the Chief Executive’s attention.

The meeting closed with an expression of appreciation for the Chairman’s sterling efforts, a sentiment that I am delighted to endorse.