AGM Minutes 2009

Minutes

Of the fifty-second Annual General Meeting of CONSUMERS' ASSOCIATION Held on Monday 16 November 2009 At the Institute of Physics 76 Portland Place. London W1B 1AD starting at 12.00 noon

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PRESENT: Professor Robert Pickard (Chairman), Mr Peter Vicary-Smith (Chief

Executive), Lord Howe (President), and some 120 Ordinary Members of the Association.

1/52 MINUTES OF THE 51st ANNUAL GENERAL MEETING OF CONSUMERS'

ASSOCIATION HELD ON 10 NOVEMBER 2008

The Minutes of the Annual General Meeting held on 10 November 2008 were APPROVED.

2/52 CHAIRMAN'S STATEMENT

The Chairman said that this was his last AGM as Chairman as his period of office was coming to an end.

The last year had seen the most difficult economic times with the deepest and longest recession in living memory. In spite of these circumstances Which? had proved to be more relevant than ever and it was possible to report some outstanding results for the last financial year.

Paid subscriptions to the magazines, website and other services had increased for the fourth year in a row - the most consistent growth in 20 years with total subscriptions growing by around 27,000 (2.5%), to more than 1.1 million. Furthermore, Which?'s campaigning and advocacy work had also shifted up a gear as the near market collapse of banks was tackled and we continued to call time on gas and electricity charging practices and lobbied food manufacturers and retailers to help consumers make better choices.

No area was more deserving of Which?'s attention than the crisis-driven financial markets. Despite some banks being almost entirely state-owned, after a taxpayer bailout of around £110 billion, very little had improved for the consumer. Which? research showed that most people thought the banks were not genuinely sorry for causing the financial crisis; that banks had not learned lessons and most felt that the bankers themselves had got away without penalty. Which? had redoubled its efforts to tackle the banks and had launched its 'Britain needs better banks' campaign. Through this campaign, Which? was pressing the banks for affordable products that ordinary consumers need and understand and for competitive banks that innovate to win custom.

On energy, Which? had been active in presenting consumers' concerns to the regulator and to government and in calling utility suppliers to account. Going forward Which? would call for longer-term reform of the energy market to ensure that there was a reliable and affordable energy supply.

In the third area, food, Which? had also made significant impact. After much campaigning, obesity now topped the food agenda, receiving more attention than ever before from consumers, governments and different parts of the food industry. There had also been positive action by many companies to reduce the salt content of their foods and the adoption of a front-of-pack traffic light labelling scheme.

Although our relevancy as a force for change had never been greater, and our reputation among policy makers was high, awareness of our campaigns successes among the general public was low, leaving the way open for others to claim the coveted title of 'consumer champion'. However, this was set to change. Going forward, through a formula of prioritizing issues ripe for change, backed with shrewd consumer insights but most importantly through applied publicity and external relations, we will ensure that constituents are made aware of Which?'s role in achieving change on consumers' behalf.

The degree of shift required in rebalancing markets in favour of the consumer is substantial. In view of resource limitations this meant focusing on one 'must win' battle every 18 months or so with other areas being resourced at a lower level. In the next 18 months, the priority would be to achieve significant changes to the financial services sector.

In conclusion the Chairman said that it had been a tremendous privilege to serve as Chairman for the last three years and was pleased to see the organization in such good heart at a time of unprecedented threat to the established way of life.

3/52 CHIEF EXECUTIVE'S STATEMENT

The Chief Executive said that since the last AGM much had changed as a result of the unprecedented financial crisis. The recession was clearly forcing shoppers to stop and reconsider where and how they buy, introducing cost-cutting strategies that were likely to last beyond the end of the downturn. But, in these challenging conditions, Which? had revamped its core offer and implemented new and better research and testing and added to these with new offerings.

In the last year demand for Which? products had remained strong and it seemed that in a tightened economy consumers were looking for advice and information from a brand that they could trust. Paid subscriptions had grown for the fourth year in a row at a time when every other publishing house had seen its stable of magazines lose circulation. Performance had been sustained through a number of measures.

Between 2003/4 and 2008/9 the amount spent on products and services research had increased by almost 50%. There had been greater research efficiency that has brought about a drop in the cost per product researched from £329.00 to £318.00 which in turn had led to a threefold increase in the number of products tested each year. The time between testing and publishing the results was now about six weeks, less than half the previous time, and the quality, value and number of all magazines had increased.

New product offering had been introduced. A Money helpline had been piloted - at no charge to members.

Through Which? Local it had become possible for members to lay their hands on trusted information about local business and services. The site now boasts over 60,000 recommendations.

Newsstand activity had been extended to Which? Money magazine.

This all represented a new way in which we did business - responding to a gap in the market by providing a service that consumers genuinely needed and couldn't get elsewhere and quickly innovating in direct response to members' changing needs and attitudes.

As for the future, Council had agreed a new strategic approach that would not only allow Which? to continue to thrive and survive in the face of challenging economic and political times, but to keep one step ahead of the changing attitudes and values of the modern consumer. This would be done by pursuing four strands of activity. The first would be to invest more in our work to change markets including intervening directly as a supplier if necessary. The initial focus would be on financial services.

The second would be to consolidate the Which? position as the trusted voice of the consumer, and third to invest more heavily in advocacy work. Finally the subscription business would be protected and enhanced.

One major initiative was the test marketing of the launch of a Which? magazine in India entitled 'Right Choice'. It was hoped that this would not only this help Indian consumers but would also generate funds to support advocacy work here and with international decision makers.

In conclusion, Mr Vicary-Smith said that whilst the forthcoming year would be challenging, this would not prevent us from pursuing strategic priorities which were anticipated to set Which? on a course for dramatic growth in terms of revenue and the degree to which consumers were made powerful. He also took the opportunity to thank Professor Pickard for all his support and all he had achieved as Chairman of Council.

4/52''' REPORT OF THE COUNCIL OF MANAGEMENT AND ACCOUNTS FOR THE YEAR ENDING 30 JUNE 2009'''

The Chairman MOVED:

THAT the Annual Report and Accounts for the year ending 30 June 2009 be received.

Mr Kitchen asked whether the commercialization of the brand and its relationship with the Which? best buy icon was damaging in any way.

In reply the Chief Executive said that the Best Buy Icon had been a success and had allowed Which? to reach out to companies and showed that Which? was still relevant. It also meant that companies were promoting the Which? brand. The use of the icon was kept under constant review.

Mr Wagner asked what the investment in India was designed to achieve. In reply the Chief Executive said that the investment in India was a long-term commitment that would allow Which? to grow and protect its future, and that was designed to payback commercially in the medium to long term.

Mr Ghosh referred to the increases in salaries of senior staff over the previous financial year and asked whether this could be justified in the current financial climate.

In reply, the Chairman said that the Council had a Terms of Service Committee that looked at senior salaries, that was in turn advised by an external consultant and salaries took into account market rates and the need to attract and retain the best people in the commercial market.

Mr Anderson complimented the organization on Which? Computing which he felt was an excellent and clear product. He also commented in the varying quality of call centres.

Mr Roche asked why nearly £10m of gift aid was deducted from the accounts each year. In reply, Mr Webster, Finance and Operations Director, said that this was money paid by the trading company to the charity and was tax-efficient.

It was RESOLVED that the Annual Report and Accounts for 2008/09 be received.

5/52 '''APPOINTMENT, NOMINATION AND RETIREMENT OF MEMBERS OF THE COUNCIL OF MANAGEMENT'''

The Chairman said that there were four vacancies on the Council of Management arising from the retirement of Tanya Heasman, Roger Pittock, Brian Yates and himself.

Five valid nominations had been received for these vacancies namely Tanya Heasman, Roger Pittock, Richard Thomas, Steve Woolgar and Brian Yates. A sixth candidate, Robin Paice had withdrawn his nomination at a late stage the previous week. Due to the scale and complexity of the annual elections to Council it had not been possible to remove his name from the ballot documentation which had to be printed in advance of the AGM. Electoral Reform Services would not be counting votes cast for this candidate.

In accordance with Article 3.7.6, the Chairman called for a poll and instructed the Secretary to arrange for the dispatch of ballot papers during the next two weeks to all Ordinary members together with all Associate members who had been paid-up for one year. Ballot papers should be returned to the independent Scrutineers, Electoral Reform Services, by Friday 8 January 2010. 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 2009 Council elections are given below)

6/52 RE-APPOINTMENT OF AUDITORS

The Chairman said that as reported in 2008, the external audit had gone out to tender with interviews being held with a shortlist of four firms. The Chairman of the Joint Audit Committee, Neville Duncan, said that of the four companies on the shortlist, namely Deloittes, Price Waterhouse Coopers, KPMG and BDO Binder Hamlyn, two were on a final shortlist and at the conclusion of the process the interview panel had decided to recommend Deloittes for re-appointment.

The Chairman MOVED: THAT Deloittes 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 Resolution was duly seconded and declared CARRIED.

7/52 REMUNERATION OF THE AUDITORS

The Chairman MOVED: THAT the remuneration of the Auditors for the ensuing year be fixed by the Council of Management.

The Resolution was duly seconded and declared CARRIED.

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.

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

Mr Snow referred to the number of advertisements for beauty products. How often did we check on valid and reasonable claims and how did Which? deal with spurious claims.

The Chief Executive said that if companies advertised products that were new, then those claims had to be justified. Helen Parker (Editorial director) said that a review took place last year that focused on the claims. This was not an easy task as independent experts were hard to find.

Mr Freeman asked whether independent standards were applied to Which?

Local and if not could this site be open to abuse.

In reply the Chief Executive said that it wasn't possible to evaluate the 60,000 organisations represented. It relied on member reviews and the more positive reviews there were for a trader then the greater the reliance that could be placed upon the recommendation. Which? was quite careful in checking for spurious recommendations. The Chairman said that a search for the 2010 Which? Local award winner was being launched today and that forms were available outside the meeting.

A member said that there appeared to be discrimination against those people without internet access and were not computer literate and noted that Which? magazine contained addresses and phone numbers as well as a web address. In reply Ms Parker said she was conscious of the point and would look at content in the magazines. It was always possible to ring the Which? contact centre. The Chief Executive said that a recent Which? publication 'Computing for the over 50s' had proved to be very popular. Many companies wanted to drive people to their websites.

Mr Shields said that the newly-formed Consumer Focus did not appear to have an appeals process without going to the Ombudsman. In reply, Ms McCallum said it was a deliberate intention not to have an appeals function as the government wanted to encourage consumers to contact companies direct.

Mr Marsden referred to an article that had appeared in the Sunday Times on 16 August 2009 about raising money for own brand ranges for Which? and asked for clarification. In reply the Chief Executive said that the article had been misleading. While Which? was introducing a new commercial structure that would allow it to grow but at the same time protect the organization and the brand, Which? had no intention of producing branded products.

Mr Thomas said that he felt the traffic light system used by the Food Standards Agency was over simple and subjective. In reply the Chairman said that however you label products will cause problems. Portion size was as important as what you eat. The Chief Executive said that it was necessary to use a system that consumers understood and that was fair about the product. Which? would support evidence-based policies.

Mr Levinger said that he had previously been advised that regulation of hedge funds was not a consumer issue. In view of the financial turmoil in the last year, this should be reconsidered. In reply, Mr Vicary-Smith said that the primary focus of Which? over the next 18 months would be financial services. Initially this focus was in retail banking. However it was clear that other elements, such as wholesale banking, had a more of an impact on individual consumers. So, we were looking at building up knowledge and then making an impact.

Mr Hoffman referred to the 2010 general election and asked whether Which? would ask the political parties about the key issues they would focus on. In response the Chief Executive said that he had a meeting with the Prime Minister in the summer, and discussed such issues as banning unsolicited credit card cheques. Which? magazine had sought to interview each of the party leaders and we would also publish our manifesto nearer the election.

Mr Conquest suggested that Council minutes should be published online. The Chairman said that he would ask Council to consider this request.