Archive for April 2012

Should the Kennel Club become a Company Limited by Guarantee

April 22, 2012

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What we know next, will change what happens next and we can’t know what we will know next.’  Karl Popper (1920-1997)

Karl Popper is generally regarded as one of the great philosophers of the 20th century and the quote above makes Donald Rumsfeld’s remark about Afghanistan much less amusing because most commentators did not think it through.  Rumsfeld said, ‘There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don’t know. But there are also unknown unknowns. There are things we don’t know we don’t know.’  He also remarked, ‘I would not say that the future is necessarily less predictable than the past. I think the past was not predictable when it started’.   These thoughts have been wandering through my mind (a slightly confused and bizarre landscape of odd nooks and crannies, impenetrable mole hills, climbable mountains and rooms full of elephants) as I contemplated the recent communication from Clarges Street about the changes proposed in the legal status of the Kennel Club, the possible move for the club and offices a couple of hundred yards down the road and the idea that the Kennel Club will act as some sort of charitable bank

I can only comment about what I know and believe, unlike some communicating through cyberspace who appear to be putting the Kennel Club’s proposals on the conspiracy theory shelf, along with who killed John Kennedy and that the moon landings were staged in a Hollywood movie studio.

Those who have followed my ramblings over the years will know that I have long held that the Kennel Club as an institution has been well past its sell by date for many years.  Fortunately, in recent years it has behaved much more as an independent regulatory body (in so far as it can) than it did when I first came into dogs over 40 years ago.  The membership retains its elements of special standing and of course, is inevitably subject to all the resentment that any organisation wielding power and demanding payment for its services from those who have no choice but to pay, is liable.  But as an organisation and institution, although I and others are continually frustrated by its slow response and inflexibility, it remains committed to its maxim of ‘promoting the general improvement of dogs’.

You will therefore not be surprised that I welcome the change in its legal status.  I am the director of four Companies Limited by Guarantee (two of which I created), I have been a been a senior manager in a major charity as well, and have over the years, served as a director of a number of limited companies.  This does not mean that I have all the answers but it does mean I have enough understanding to begin to pick apart the ‘knowns’, ‘unknowns’ and ‘unknown unknowns’ with slightly more confidence than those who have not had that experience.  Companies Limited by Guarantee are a halfway house between a Registered Charity and a Limited Company.  These three, plus Royal Charters and Public Companies, are the usual ways in which an organisation, as distinct from an individual or group of individuals, can have a legal status.  An individual has a legal status and a small commercial group can be defined as partners (these partnerships can have limited liability similar to that of a limited company) and larger groups can organise themselves as a private club.  Private clubs includes those involved in running village halls, golf, sport and recreation, privacy (Gentleman’s Clubs) or dogs.  Most canine societies for instance are private clubs.  They are generally subject to common law in terms of their finances, employment and, more recently, blanket legal requirements such as the ban on smoking but other than that, government and local authorities prefer them to get on with what they do as, generally, they have little impact on anyone other than their own members.

Occasionally private clubs become very influential, wealthy or powerful and it is at this point that the organisation must consider whether its structure is suitable for its responsibilities.  The Kennel Club fulfils all three of these perceptions to some extent so it is sensible, particularly as it’s wealth may shortly be significantly improved, so it is entirely reasonable that the matter should be considered and in my opinion a Company Limited by Guarantee which enables membership of the organisation to retain its independence but also protects its future income and accrued assets is the right way to go.

Despite the understandable protectionism that is part of the communal DNA of the membership, there is virtually nobody now who cannot become a member, so the move towards becoming a Company Limited by Guarantee is sensible.  To give you a little more detail, companies limited by guarantee are private limited companies where the liability of the members is limited.   For instance, as things stand, should the kennel club suffer disastrous financial meltdown (as actually happened in the 50s by the way) the members would be required to provide the money to pay its debts as was the case with the Lloyds market a few years ago.  This is what it means when anyone signs up to be a guarantor for a dog show.  If anything goes wrong that guarantor is jointly responsible for the debts along with the others and this, no doubt, is why some societies have themselves decided to become companies limited by guarantee.

A guarantee company does not have share capital, but has members who are guarantors instead of shareholders.  But unlike a private club in this case the guarantee is ‘limited’ and takes the form of an undertaking from its members to pay a nominal sum in the event of the company being wound up while they are a member or within one year of their ceasing to be a member. The amount of money that is guaranteed can be as little as £1 and will be stated within the constitution of the company, (the Memorandum & Articles of Association).

Guarantee companies are useful for non-profit organisations that require corporate status. This means that its profits are not distributed to its members but are retained to be used for the purposes of the guarantee company. This does not mean that the guarantee company cannot make a profit and where an organisation enters into contracts (as the Kennel Club does regularly) a limited liability protects its Board of Trustees and its members.  In short, a guarantee company provides a clear legal identity. This provides the ability for the company to own property in its own name and a democratic structure where its participants are required to adhere to the strict laws and regulations governing limited companies generally.

I hope all this technical stuff helps and I will be returning to the other items on the Kennel Club agenda in future weeks.  However in the meantime and going back to the ‘knowns’, ‘unknowns’ and ‘unknown unknowns’, you might remember the way in which financial services were released from regulation back in the 80s when building societies were allowed to become banks.  It was an opportunity grasped by city institutions and individuals to make fantastic amounts of  money in return for the few pounds given to the shareholders Almost all have failed and are now in deep trouble while most of those societies that stayed ‘mutual,’ are solid and successful.  We should bear this in mind in the next few months.

PS 20th April 2012: Since wrting the above piece I have been made aware of a number of changes to the Companies Act which have made me question the idea that the Kennel Club becoming a Company Limited by Guarantee would be ‘a good thing’.  There are a number of snags in becoming a body that has legal status.  The options (Limited Company, Company Limited by Guarantee, Charity, Partnership, Trust etc) are strictly limited and all impose conditions that might be a straitjacket rather than a comfortable and useful coat.  At the time of writing I have yet to make up my mind as to what would be best for the world of dogs.

Kennel club reform takes the snail’s route!

April 14, 2012

This article was written in 1996 and was published in the 1997 Our Dogs Annual.  To be fair matters, have moved on and I have inserted comments in the article between brackets to make this clear. But the recent discussions and proposals being put forward by the Canine Alliance bring much of what I wrote at that time into a new perspective given that 16 years have passed.  All my thoughts on these matters are in Speakers’ Corner in the next (April20th 2012) edition of Our Dogs

David Cavill

KENNEL CLUB REFORM – snail’s pace!

Readers of Our Dogs will  recall the huge reaction to the Our Dogs/Dog World Questionnaire of 1995 which clearly showed the demand for urgent reform of The Kennel Club. (In 1996 a survey of the views of exhibitors was carried out jointly between Our Dogs and Dog World and the results showed that there was a high level of dissatisfaction with the mechanisms in place for election to membership of the Kennel Club and for the general ‘private club’ approach to the administration of world of dogs.) Much has since been written but virtually nothing has been actually done.
Despite the work of the Ronnie Irving sub-committee set up to make recommendations for reform, it is becoming increasingly clear that this has been a vehicle for slowing progress rather than increasing it.  The two suggestions which have been wrung from our governing body are a change to the way in which Kennel Club Liaison Councils are organised and elected (delayed for at least two years on recommendation at the last Annual General Meeting) and a recommendation that Associate Members could be elected to sit on Kennel Club sub-committees. Big deal.
Readers will know that the Kennel Club consists of a maximum of 750 (Since increased to 1,500) members of whom about 150 (now about 350) attend Annual General Meetings to elect a General Committee. The General Committee then elects a Chairman (who, constitutionally, is automatically also Chairman of the club) and appoints various sub-committees and councils. There is already open election to Liaison Councils (so the first reform noted above will achieve very little) and as the rules require that sub-committee members must be ‘approved’ by the General Committee the fact that Associate Members may stand has little relevance. It is likely that the status quo will be preserved.
So far, so little. On the above evidence, there can be no doubt that the public relations assault asserting that that ‘things are really changing’ on the ears of anyone who will listen, despite probably being genuinely believed by those detailed to relay it, is pretty meaningless.
Ronnie Irving, like many members of the General Committee, is an honourable man and, I believe, genuinely wants the serious matters raised by the Our Dogs/Dog World Questionnaire to he addressed. The problem is not the individual committee members. They all certainly give the impression that they recognise that change must come. No: the problem is inertia. Perhaps I might he permitted to sort out the wood from the trees for those involved appear to be prevented from doing so.
The General Committee has the responsibility of organising the affairs of the world of dogs. As has been regularly highlighted in the canine press, the Kennel Club has a great deal of which it should he proud but at the end of the 20th century while the interest of so many are controlled by so few and when the ‘few’, despite their individual qualities and undoubted commitment, are seen so often to be out of touch with the ordinary participant, then reform becomes imperative. In fact, on the principle that there should be no taxation without representation and no regulation without consultation I believe that the Kennel Club has a moral duty to broaden its base of government.
It is possible, even likely, that those in power at present will remain in power under any new constitution. But whoever they are, at least they will know that they have the support of those interested enough to he involved rather than just those who are members of a club which, statistically, represents at most .25%. of those involved in the world of dogs.
The idea that a working party be set up to examine the issues and report back to the members was a good one, for the whole matter required extensive discussion and any recommendations must be acceptable to the current membership. However, although revolution is not required a rapid evolution certainly is.
My view is that some limited representation is necessary to ensure that only those with a genuine, long term interest are enfranchised. This is not a new idea. The late Stafford Somerfield, writing in 1984 just after he had proposed a motion calling for increased democracy, said “I suggested 10 years service with a breed club was sufficient qualification for membership. What was needed were more young people, but experienced, and with knowledge of all aspects of the dog sport. It was time to drop the ‘us and them’ image. The elite and the downstairs.”
Despite the admission of ladies to the club in 1979, a change the KC was forced to accept as the result of imminent court action, there was little support for the motion and Stafford withdrew it. Twelve years later (and a further 15 since this article was written) nothing – well, very little other than the next paragraph, has changed!
An immediate task is to reform the appalling and iniquitous election system which has seen many people who are well known and deeply involved in the world of dogs turned down for membership (this process is now almost automatic so progress has certainly been made here). I have nothing against election via a proposer and seconder but the procedure must be transparent, open to appeal and clearly fair. Greater participation via the Associates and the Liaison Councils is, it is true, a step forward, albeit a small one, but no-one is going to be fooled into thinking that consultation is a substitute for democracy! I would also suggest that Associates who have been on the register for (say) five years should have an automatic right of membership should they so wish.
At the same time I believe that there is a good case for a ‘town’ or ‘country’ membership. Those who wished to make use of the Kennel Club’s ‘club’ facilities in Clarges Street could do so automatically on payment of an increased subscription. The Kennel Club is only open f or lunch at present so, comparing rates with other London clubs, perhaps £300 would he appropriate. The ‘country’ subscription would cover administrative costs of membership, the Kennel Gazette, Breed Records Supplements and the Stud Book (£50?). Otherwise, I would envisage a structure very like the one operating at present. There is nothing wrong with it except that any suggestion that it is ‘democratic’ is patent nonsense.
Wider enfranchisement is one issue but there is another which has been highlighted over the last few months. I am amazed that not a single word has been heard about what is, in effect, a potentially much more serious matter. The Kennel Club is not a Trust, a Charity, a Company Limited by Guarantee, a Limited Company or a Public Company.  Even QUANGOs have a legal status but the Kennel Club has none. The club is similar to a partnership (or Lloyds prior to Equitas) and this means that members have unlimited liability (there have been changes hers and incorporation is currently being discussed)
Until these issues are addressed, tinkering at the margins is a waste of time.
Nobody is suggesting that the changes outlined above would greatly improve the organisation of the Kennel Club but it would mean that a running sore would be attended to, that the ‘them and us’ feeling that is rife within the world of dogs at present would be avoided, that the Kennel Club would genuinely represent the world of dogs in discussions with government and other agencies and that our status abroad – currently at a very low ebb – with kennel clubs throughout the world (no change there, then), would be greatly enhanced.
Will the Kennel Club membership have the courage to grasp the nettle? They may be too out of touch to realise that this move is an opportunity not a challenge. But if they do not have the courage to move forward at a controlled pace matters may be taken out of their hands for there is a determined movement towards an alternative kennel club which would rapidly move towards membership of the FCI.
Some will say such an organisation has no chance of success but whether it succeeded or not is irrelevant for there is nothing which would he more damaging to the world of dogs as we know it in the UK.
Accepting a proposal for greater participation is certainly a risk – but rejecting it could be a greater one.