AGM Minutes 2010

MINUTES OF THE FIFTY-THIRD ANNUAL

GENERAL MEETING OF CONSUMERS' ASSOCIATION

'''HELD ON FRIDAY 22 OCTOBER 2010 AT THE INSTITUTE OF PHYSICS 76 PORTLAND PLACE, LONDON W1B 1AD STARTING AT 11.00AM'''

PRESENT:

Professor Patrick Barwise (Chairman)

Anthony Burton (Deputy Chairman) Richard Thomas (Deputy Chairman)

Mr Peter Vicary-Smith (Chief Executive)

Lord Howe (President)

Andrew Reading (Company Secretary)

and some 110 Ordinary Members of the Association

1/53 ARTICLES OF ASSOCIATION

The Chairman said that there were two reasons why the Council was recommending the adoption of new Articles of Association. The first was to make them compliant with the Companies Act 2006, which was the latest piece of legislation to update and modernise company law. The second was to introduce a number of changes the Council felt were necessary. Of these, the most significant was to introduce limited terms for elected Council members: up to three successive terms of three years followed by a two-year break clause. This reflected the practice of many other organisations.

Mr Batchelor asked whether it was possible under new Article 11.23 to circumvent the new requirement for a two-year break period for Council members retiring after three consecutive terms by a Council member resigning before his or her term was due to end, and then being re-elected before two years had elapsed. Mr Batchelor was advised that the Articles did not permit this.

The Special Resolution was duly CARRIED, 1207 votes in favour, 29 against and 20 abstentions.

2/53 '''MINUTES OF THE 52nd ANNUAL GENERAL MEETING OF CONSUMERS' ASSOCIATION HELD ON 16 NOVEMBER 2009'''

The Chairman proposed that the Minutes of the Annual General Meeting held on 16 November 2009 be APPROVED.

The Resolution was duly CARRIED, 1215 votes in favour, 2 against and 39 abstentions.

3/53 CHAIRMAN'S STATEMENT AND PRESIDENT'S COMMENTS

The Chairman said that he would like to thank his predecessor, Robert Pickard, for his first rate work as Chairman over the previous three years as Which? successfully navigated its way through turbulent times. The current year had seen the challenging times for consumers continue with ongoing concerns about job security and government cuts. Which? had focused on consumers getting the most from their budgets and this had proved to be an effective strategy with subscriptions up 9% year on year.

The Strategic Plan agreed by Council in September 2009 had targeted five "must win" battles: achieving positive change for consumers; being the trusted voice of consumers; significantly growing income; strengthening the subscription business; and developing the organisation needed to deliver success.

There were ambitious commercial targets both for strengthening the current subscription model and for generating income through new products. There was a commitment to deliver more change for UK consumers and the strategy for achieving this was to take on one major battle every 18 months or so. The first cross organisational priority had been Financial Services. Which? had worked in this area for many years, but the banking crisis had brought a new impetus and a new approach. In launching the Banking Commission, rather than working alone, Which? had brought together senior political, city and regulatory figures to take a look at the whole of the banking system. This report had been well received, and now the task was to get the key recommendations adopted, along with further work on savings, mortgages and investments. While this priority was scheduled to last until autumn 2011, Council had already selected energy and energy efficiency as the next priority.

Other initiatives in the last year included Which? Connect, the online survey community where subscribers' views on the products and services they used were welcomed; the Which? Conversation between Which? and consumers about the consumer issues of the day, and the Which? families who had agreed to help with research and planning throughout the year.

The Chairman also referred to the undertaking given at the last AGM to consider publishing Council minutes online. Council had discussed this in March and decided not to publish more widely in view of the commercial and other sensitivities. Finally, the Chairman announced, with regret, that Lord Howe was stepping down as President of CA after 18 years. Lord Howe had worked on consumers' behalf for more than 35 years, and his association with Which? stretched back to 1974. The Chairman concluded by saying that he spoke for everyone when thanking Lord Howe for his considerable contribution to both Which? and the wider consumer cause. He then invited Lord Howe to say a few words.

Lord Howe said it had been a great privilege to be associated with the consumer cause over a very long time since being appointed as the first Minister of Consumer Affairs in the government of Edward Heath. Which? had undertaken its work in a tenacious way over more than 50 years under a number of impressive CEOs going back to Michael Young.

Lord Howe said he was also patron of the UK Metric Association and urged that the process of metrication be completed, and hoped that this issue would remain on the Which? agenda. In conclusion, Lord Howe said that he had very much appreciated and enjoyed being President. Which? was a remarkable and important organisation and wished whoever might be his successor the best of good fortune.

4/53 '''CHIEF EXECUTIVE'S STATEMENT'''

The Chief Executive said that the tough economic climate had seen traditional publishing suffer almost uniform decline. However, against this background, Which? had achieved a 9% rise in subscriptions, the largest increase for 20 years, and a 6% growth in revenue. The end of year had seen 1,226,000 subscriptions, more than 100,000 ahead of the previous year. This had been achieved through continuing the core strategy of providing independent and expert advice. The magazine had been redesigned during the year to give it a more modern look and feel, as well as making the structure and layout clearer and easier to use. This redesign had reinforced the positioning of the magazine as one part of a bigger subscription package, together with the valuable subscriber benefits of the Money Helpline and Which? Local.

Which? Computing helpline continued to go from strength to strength and the magazine was now the best selling computing title in the UK with 186,000 members at the year end.

Which? Local's growth meant that there were now more than 80,000 reviews on the site, together with more than 55,000 recommended local businesses. In addition to emphasising the breadth and value of the offer, there had been increases in the efficiency of recruitment activity during the year, most significantly by extending the bundled recruitment approach to all online channels.

The year had also seen the laying of foundations for potential new revenue streams. A magazine called Right Choice had been trialled in India which was the first foray into international activity. The magazine was of high quality, and marketing routes were currently being tested. Building income through new businesses that delivered benefits for consumers would allow more money to be spent on Mission related activity It was essential for Which? to diversify to ensure continued support for advocacy work in the future.

Significant advances had also been made in policy and advocacy work. The cross organisational focus on financial services was exemplified by the Future of Banking Commission report. This report had been widely welcomed as adding new and valuable thinking on the future of the financial system. The next organisational priority selected by the Council of Trustees was energy and energy efficiency

In conclusion, the Chief Executive said that the progress made across all five areas of the Strategic Plan was a strong demonstration of the abilities and commitment of the staff at Which? across the organisation, and of the power a committed body of members enabled Which? to wield in the corridors of power.

5/43 '''REPORT OF THE COUNCIL OF TRUSTEES AND ACCOUNTS FOR THE YEAR ENDING 30 JUNE 2010'''

The Chairman MOVED:

THAT the Annual Report and Accounts for the year ending 30 June 2010 be received.

Mr Nairne said that the Report and Accounts for 2009/10 had been received later than usual and asked whether this was due to the fact that the AGM had been held three weeks earlier than usual. The Chairman said that the AGM had been held earlier than usual because of the changes being made to the Articles of Association. These changes in turn affected the ballot documentation and its dispatch to members in late November. In 2011 the AGM would revert to its usual time of mid November, which in turn would allow members more time to review the Report and Accounts prior to the AGM.

Mr Ghosh referred to the remuneration of the highest paid employees as shown in the financial statements together with the total salary bill and benefits bill and suggested that in the current economic climate greater restraint should be shown.

In reply, the Chairman said that the Council had a Terms of Service Committee which reviewed the salaries of the highest paid employees, and in doing so, took advice from an independent consultant. Three sets of benchmarks were used and remuneration was linked to performance. In the last year the organisation had been very successful. More generally, one of the five goals in the Strategic Plan was to develop an organisation that would deliver tough commercial and policy objectives, and this required attracting the best people. The Chief Executive said that twenty staff had been added to the payroll in the last year and, if this was taken into account, the overall percentage salary increases was similar to the previous year.

Mr Winterfield said that although subscriptions had increased in each of the last five years, he noted that reserves had fallen since 2007 and the inflow of cash had slowed in the last year. Mr Winterfield also inquired about the proportion of the membership that fell into the younger age group.

The Chief Executive said that Which? membership was heavily skewed towards older groups, although that wasn't a concern as the average age wasn't increasing and Which? Digital was attracting a younger profile.

In respect of the level of reserves, the view was that it wasn't necessary to build these up any further as they were already at a level that was more than comfortable to provide sufficient security.

Mr Lee-Amies (Audit Partner) said that during the year, incoming resources had increased significantly. Investments had gone up by £2.7m and the decrease in reserves was for non-cash reasons - primarily as a result of the deficit on the pension scheme identified at 30 June 2010. A lump sum of £1.2m had been used to remove part of the pension scheme deficit under the pension scheme recovery plan agreement.

Mr Levinger asked for an explanation of the large figures for sale and purchase of fixed assets.

The Chairman said that Consumers' Association had moved from active to passive management which had reduced managed fees - this meant buying and selling a lot of assets and so it was purely an adjustment to the structure of the portfolio of investments.

The Resolution was duly CARRIED, 1226 votes in favour, 5 against and 25 abstentions.

6/53 '''APPOINTMENT, NOMINATION AND RETIREMENT OF MEMBERS OF THE COUNCIL OF TRUSTEES'''

The Chairman said that there were four vacancies on the Council of Trustees arising from the retirements of Tony Burton, Sue Leggate, Natalie Macdonald and Gary Waller.

Eight valid nominations had been received for these vacancies namely Tony Burton, Sue Leggate, Natalie Macdonald, Jennifer Oscroft, Tim Roberson, Jonathan Thompson, Gary Waller and Brian Yates.

In accordance with Article 10.27 the Chairman called for a poll and instructed the Secretary to arrange for the dispatch of ballot papers to all Ordinary members together with all Associate members who had been paid-up for one year. Ballot papers are to be returned to the Independent Scrutineers, Electoral Reform Services Limited, by Friday 7 January 2011. The results would be notified as soon as possible thereafter* and would be deemed to be the resolution of the AGM. The Chairman said that most members voting in the elections would have the choice of voting by post, telephone or internet.

(* The results of the 2010 Council elections are given below)

7/53 APPOINTMENT OF VICE-PRESIDENT

The Chairman said that Council had recommended that Christopher Zealley be appointed as a vice-president of the Association. Mr Zealley had been elected to Council in 1974 and, apart from an absence of a year, had remained a Council member until 2008. Mr Zealley had been Chairman between 1976 and 1982. He continued to be actively involved in consumer matters and was a trustee of Ricability, the Which? sister consumer organisation that worked on behalf of disabled consumers.

The Chairman MOVED:

THAT in accordance with Article 13.4 Christopher Zealley be and is hereby appointed as a vice-president of the Association.

The Resolution was duly CARRIED, 1196 votes in favour, 18 against and 42 abstentions.

8/53 RE-APPOINTMENT OF AUDITORS

The Chairman MOVED:

THAT Deloitte LLP be re-appointed as auditors to hold office until the conclusion of the next General Meeting at which accounts are laid before the company.

The Chairman thanked Mark Lee-Amies for his professional advice and help.

Mr Yates noted that Mr Lee-Amies had been the audit partner for five years and asked what the rules were in terms of moving to a new partner. It was noted that Deloitte had their own rules on this matter and planned that Which? would have a new audit partner in about a year's time.

The Chairman MOVED:

THAT Deloitte LLP be re-appointed as Auditors, to hold office until the conclusion of the next Annual General Meeting.

The Resolution was duly CARRIED, 1191 votes in favour, 31 against and 34 abstentions.

9/53''' REMUNERATION OF THE AUDITORS'''

The Chairman MOVED:

THAT the remuneration of the Auditors for the ensuing year be fixed by the Council of Trustees.

The Resolution was duly CARRIED, 1222 votes in favour, 11 against and 23 abstentions.

There being no other business the meeting ended at 1.00pm

The Chairman said that he would now devote around thirty minutes to questions from the floor. These questions, together with the responses, are attached to the minutes.

Election of members of the Council 2010

The results of the 2010 elections which closed on Friday 7January 2011 are as follows:

4 vacancies

'''Questions and answers dealt with following the conclusion of the Annual General Meeting'''

Mr Nairne said he had an account with RBS bank and its predecessors going back 50 years, and was concerned that it would move to Santander. Given that Santander now owned a large proportion of the banking sector, did Which? have a view on Santander acquiring another bank and the procedures to transfer accounts?

The Chief Executive said that Santander came low in customer service surveys. Which? had argued that the transfer of RBS branches was an opportunity to increase competition but the Government had disagreed. Which? believed these types of disposals should have a public interest test and increase competition in the banking sector. In conclusion Which? felt this was a bad decision and did not want the sale of Lloyd's branches to go the same way

Mr Reynolds said that he understood that about 30m people were accessing information via the internet and asked whether this was reflected by the Which? members. Mr Reynolds also asked what the future was for the Good Food Guide given internet access to very recent review of restaurants that could be found on websites such as 'Top Table' or 'Trip Adviser'.

Helen Parker (Assistant Chief Executive) said that more than nine in ten Which? members had access to the internet and many were heavy users. It was now a critical part of the subscription offer. That proportion would increase and work to make the site more usable and up to date would continue.

Angela Newton (Head of Which? Books) said that the Good Food Guide was the best selling guide in the UK. Content was updated on the Which? Members' site and a new GFG website would be launched to enable content to be updated quickly and for members to post their reviews. An iphone app had been very successful and the intention was to develop apps for other devices. There were also plans to develop the GFG brand over the next 18 months.

Mr Wagner noted that there had been some radical restructuring within Which?. The marketing profile had changed radically and the question was what effect there had been on membership churn rates.

Mr Gardner (Commercial Director) agreed that there had been a radical change in the way marketing activity was carried out. More customers had been brought in and churn was slightly lower. However, it was a strategic objective to strengthen the subscription business and look for even better performance. At the Hertford Customer Service Centre a 'save team' had been formed to try and persuade members not to cancel. This had been successful and 30,000 subscriptions had been saved in the last year.

Mr Bladon said he supported Lord Howe's comments on metrication and hoped that Which? would highlight the Local Authorities where Trading Standards Departments are not enforcing unit price regulations.

The Chairman said this had been discussed by Council and the decision had been made not to pursue the matter due to the lack of consumer detriment. Any action that Council might take in the future would be selective.

Mr Winterfield said that 2 years ago he had asked the question about the availability of Which? magazine online and the ability to download in pdf form. Pdfs should be there at the time the magazine arrived.

Ms Parker said that she understood that people wanted to download the magazine and it was important that the online and magazine content complemented each other.

Steve Pitman (Head of Online) said that mobile was very important to Which?. It allowed people to download snippets of information, which was why iphone applications had proliferated. A couple of applications had been tested to see how well they were used and the next step was to work out the best and most cost effective way to take this forward.

Mr Miller asked about the future of Consumer Focus.

Helen McCallum (Director of Policy and Communications) said that a lot of Consumer Focus's responsibility would transfer to Citizens Advice. Which? was in touch with the Government as it was keen to ensure that there was robust consumer protection and, if necessary, Which? might step into fill some gaps. In some areas Which? would be left as the only consumer representative. The Chief Executive said that Citizens Advice had traditionally dealt with people in the most excluded categories. However, there was a need to ensure that a wider range of consumers would also be supported.

Mr Jones questioned the way member queries were handled and also said that reports in the magazine were sometimes short on detail and that in the case of cars, it was necessary to buy the full magazine in Sainsbury's. Mr Jones also queried the testing process.

Ms Parker said that there had been a huge investment in recent years to ensure quality information was delivered to members. It wasn't possible for reasons of space to print everything. Updates and the latest test results were online and this combination allowed members to get the best possible information. Member queries were answered via the customer service centre, and from there to an in house expert. Which? Car in Sainsbury's should be published at the same time as the version going to members.

Paul Smith (Head of Which? Research) said that over last few years we had transformed the way we tested, from a magazine based format of testing, i.e. batches for articles, to testing continuously so this is comparative over a broader period of time and products are tested when they are launched. Reference samples were held to ensure everything was comparative.

A member said that on page five of the Annual Report, the Chief Executive had stated that over the next five years Which? aimed to achieve positive change for the UK consumer and develop the organisation needed to deliver success, and asked how that was to be achieved.

The Chief Executive said that achieving positive change for consumers had two dimensions. Over five years there would be the step by step changes in many areas, and on top of that, there were cross organisational policies where in one significant area there was a significant attempt to shift the market over a period of 18 months.

In terms of developing the organisation it was necessary to have all the things needed to make the organisation work well i.e. the right people, a joined up organisation and the right infrastructure.

Mr Levinger asked about the organisational arrangements for the Indian operation.

The Chief Executive said that all the activity took place under a 100% owned company. Which? was not getting involved in advocacy work in India but had committed to give grants via Consumers International to local groups for them to do advocacy work.

A member said that he had been kept waiting for fifteen minutes when dialing the Which? Customer Service Centre. The Chief Executive said this was unusual and the case would be investigated. This member also suggested that because of the economic climate, Which? subscriptions should be increased. The Chief Executive said that Which? had not increased prices from 2000 to 2009 on the main magazine and online offering and had no plans to increase prices again. While mindful of the economic climate, it was important to deliver great value for money.

Mr Hoffman asked whether in terms of taking on matters from Consumer Focus, Which? would be seeking money from Government. The Chairman said that Which? would not take money from government. Mr Hoffman also thought there was a market for Which? educational materials and in reply Mr Gardner said that Which? was looking at exploring this area and engagement with younger people.

Mr Prince said he would welcome the annual index to Which? magazine being reinstated. Ms Parker said that this was under review.