Trustees report and financial statements 2020

STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION THE ROYAL SOCIETY TRUSTEES’ REPORT AND FINANCIAL STATEMENTS 50 SCIENCE SHAPING THE WORLD WE LIVE IN 51 Governance Structure and management The Society is a registered charity and Council is the Trustee body under charity law. The Society was founded in 1660 and incorporated by Royal Charter. A Supplemental Charter was granted in 2012, and that now serves as the Society’s governing document. The governing body of the Society is its Council, whose members are elected by and from the Fellowship. Under the Charter, Council ‘shall and may have full authority, power, and faculty from time to time to draw up, constitute, ordain, make, and establish such laws, statutes, acts, ordinances, and constitutions as shall seem to them, or to the major part of them, to be good, wholesome, useful, honourable, and necessary, according to their sound discretions, for the better government, regulation, and direction of the Royal Society aforesaid, and of every Member of the same, and to do and perform all things belonging to the government, matters, goods, faculties, rents, lands, tenements, hereditaments, and affairs of the Royal Society aforesaid.’ Council The Charter specifies that Council must have between 20 and 24 members, each of whom must be a Fellow of the Society. Council determines the strategic direction of the Society and in particular approves the Society’s strategic plan. Council also approves plans for specific charitable programmes on the recommendation of relevant committees, and those committees oversee activities within the programmes on behalf of Council. There are currently 23 members. Council has reflected on the new Charity Governance Code for larger charities and supports the principles set out and the model for continuous improvement. The Society’s constitution limits Council’s ability to conform to some of the principles in the ways that might be adopted by other charities; however, in these instances, the Society seeks alternative means of achieving the same outcome. Council completed a self-assessment in the year based on a series of interviews with Trustees and the results of this review will be used to make improvements to the Society’s governance framework. Membership of Council Among the members of Council are the President, who is the Chair of Council, and four Officers: the Biological Secretary, the Foreign Secretary, the Physical Secretary and the Treasurer. During the year there were also 18 so-called Ordinary Members. The President and the Officers normally serve five-year terms and the Ordinary Members serve three-year terms. Changes in the membership of Council took place as usual on 30 November, which is the Society’s Anniversary Day. The new members received an induction that included a review of relevant documents and presentations on Trustee duties by a partner in a leading charity-law practice. During the year, Council also received guidance from professional advisers on specific matters and updates on relevant developments affecting charities and Trustees. Council delegates responsibility for day-to-day management of the Society’s affairs to the Executive Director. There have been 61 Presidents of the Royal Society since it was founded in 1660. Previous Presidents of the Royal Society have included Christopher Wren, Samuel Pepys, Isaac Newton, Joseph Banks, Humphry Davy and Ernest Rutherford. The year ended 31 March 2020 is the last full year with the current President, Sir Venki Ramakrishnan, in post and the election process for the new President began in the year. The result of a ballot of the Fellowship was confirmed at a meeting of the Society’s Council on 5 May 2020 and Sir Adrian Smith will take up the post of President on 30 November 2020. Public benefit Fellows are not remunerated for serving as Trustees. Council has complied with its duty to have due regard to the Charity Commission’s public benefit guidance when exercising any powers or duties to which that guidance is relevant. Information about public benefit provided by the Society is presented in this report. Committees The Society has a system of committees, which included 46 principal active Standing Committees and 28 principal Working Groups. Standing Committees include committees that oversee key strands of the Society’s work, committees that make recommendations to Council of recipients of medals and awards and committees that assess applications for and make grant awards. All Standing Committees have terms of reference agreed by Council that set out the delegations of responsibility to that committee and, for the majority, a member of Council sits on the committee. The committee structure diagram on the following page illustrates the Society’s committee structure by type of business and provides additional information on committees relevant to central business on finance, planning and subsidiaries. Key business in the year In the year, Council received regular reports from the Executive Director and Board as well as reports from key committees, including Audit Committee; Diversity Committee; Education Committee; Hooke Committee; Nominations Committee; Planning and Resources Committee; Public Engagement Committee; Publishing Board; Science, Industry and Translation Committee; and Science Policy Committee. Council made further considerations of the impact on science and science funding following the UK’s decision to leave the EU, approved the agreement of the Pension Triennial Valuation and recovery plan, considered and agreed the Council risk register and discussed matters on sustainability and the Society’s role in this area. With a view to increasing the diversity of Officers, Council agreed to submit an application to the Charity Commission to make grants to Officers’ parent institutions to reimburse some of the costs that arise from the significant time commitment involved in Officers’ roles. We received the Charity Commission’s consent to the proposal in February 2020 (confirmed by the Commission in an Order in May 2020). This initiative is expected to bring more diversity to the field from which Officers, who will continue to be unpaid by the Society, is drawn. In March 2020, following careful consideration of the current course of the COVID-19 pandemic, Council made the decision to implement a closure of the Society’s buildings to Fellows, staff, conferencing clients and other visitors. The decision was taken in the interests of all our stakeholders. Although the building was closed, the business of the Society continued with staff working remotely, wherever possible. Meetings and events from the programme that had been planned for 2020 were cancelled or postponed, and the possibility of moving to virtual platforms considered. In line with government advice, Chicheley Hall closed on 23 March 2020. Council approved the Society’s budget for the 2020/21 financial year. The budget was revised to reflect changes assumed due to the impact of the pandemic and, although there was a significant reduction in the Society’s key programmatic and trading activities, the net financial impact anticipated is relatively modest. The Society concluded a review of operations at Chicheley Hall in the financial year. Chicheley Hall has hosted numerous science meetings in a way that was conductive to knowledge exchange and the development of networks, but much has changed since the time of purchase and the Society had exhausted options to make the business financially viable. As such, Council decided to progress with a sale of the property. The management of the property was outsourced to De Vere Venues and, following the closure on 23 March, De Vere wrote to the Society to give notice that the closure was a ‘force majeure’ event and subsequently gave notice on the contract, which expedited the Society’s next steps to progress with a sale of the property. Above: Drawing of the Royal Society’s Charles II mace, 1896.