PRS for Music’s 2020 Annual General Meeting (AGM) is set to take place at 12pm on Tuesday 18 August.
With the most significant governance changes for the organisation in 20 years on the agenda at this year’s AGM, this is a historic time for PRS and the 145,500 songwriters, composers and publishers it represents in the UK and worldwide.
M Magazine spoke to Nigel Elderton, chairman, PRS for Music, about the proposed restructure and why it’s so crucial in 2020.
Why has PRS decided that it’s time to review its governance?
The industry has changed immeasurably since the last review. PRS faces greater competition from new entrants and from some overseas societies. We also need to allow management to run the business efficiently and be able to make decisions quickly without having to undergo a laborious process of meetings and approval stages.
How has the music industry changed in the 20 years since PRS’ governance was last reviewed?
In the past twenty years since PRS undertook the last governance review there has been a great many changes in our industry, including the fragmentation of digital mechanical rights, the introduction of pan European digital licencing and the move from physical to the digital dissemination of music.
Can you talk us through the process so far?
We embarked upon the governance review process in late 2018. We engaged Mazars and Baker Bots (legal advisers), who are specialists in governance matters, to complete a robust review of our existing structure and practices. Mazars carried out a survey of PRS Directors and conducted individual and group meetings with members and senior management of PRS including some former PRS staff. They then benchmarked PRS against other membership organisations and recognised principles of good governance.
'We need to allow management to run the business efficiently and be able to make decisions quickly without having to undergo a laborious process of meetings and approval stages.'
What are the key changes you’d hope to see following a restructure?
In all, Mazars presented the board with 44 recommendations. Some are small ‘tweaks’ to what we already do and others are what I would describe as key changes to the way we govern ourselves. For example, we will be changing the size and remit of what is currently the main PRS Board into a Members Council. Its purpose will include the review of the company’s performance, the shaping of strategic decisions, greater engagement with the membership, approval of the annual budget and major capital expenditure and the appointment of the PRS CEO and PRS for Music Board.
Another very important change will be the limit on the term that directors are able to sit on the Council (15 years max) and Board (nine years max) which will hopefully lead to a positive turnover of new directors. Finally, the outreach programmes that we intend the Members Council to operate will hopefully encourage a greater gender and ethnic balance and stronger engagement with our members.
Why will the three highest earning publishers be designated a seat?
As part of Mazars recommendations, they suggested that we should move to collegiate voting. In plain terms, this will mean that writers vote for writers and publishers vote for publishers. This way there can be no one cohort that is able to influence the election of a director of another cohort. While discussing this, the board felt that it was appropriate that the three largest earning publishers should have designated seats on the Council as they represent a significant amount of the rights PRS represents. However, as the quid pro quo for designated seats the three major publishers will not be able to vote for the remaining publisher places. This provides the other independent publishers the opportunity to vote among themselves.
'I hope that the Members Council will be more accessible to members. It will listen, take the temperature on issues that matter to our members rather than being a board of directors who some feel are remote and less engaged with our members concerns and wishes.'
The industry standard term limit is 3 x 3 years but PRS’ will be 3 x 5. Why is that?
Yes, Mazars did recommend that we should limit Directors’ term to a maximum on nine years (3 x 3 terms). The term can run consecutively or could be broken up into several separate periods. We have adopted this recommendation for the PRS for Music Board and for the iNed’s (the external Directors). However, there was a strong feeling from writer and publisher directors that for the Members Council it was important to try to retain a greater pool of knowledge and experience particularly as the amount of directors will reduce from 22 to 16. As such, we agreed to make an exception and have a maximum term of 15 years (3 x 5 terms max).
What’s the difference between the Board and the ‘Members’ Council?’
As explained above the Members Council is very much focused on the vision and strategic direction of the PRS. Member engagement, listening to members views is also a key part of what the Council will be doing. The current PRS for Music Board will consist of 12 directors (four writers, four publishers and four iNeds) plus the CEO and will be responsible for the day to day operations of the company; the business if you will. The Board reports up to the Council and has the important committees of Licencing, Distribution and Conflicts reporting into it.
How important is it that PRS members engage in this process and how can they do so?
It is incredibly important that members understand what the proposed changes are, why we are hoping to bring them in and what the benefits of the new governance will bring in modernising the way their PRS works and will operate in the 21st Century.
Members can engage with the process by voting for these important changes at the forthcoming AGM. The voting forms and procedure can be found online and members should have already received a notification from PRS.
What difference could a change in Board structure make to the lives of PRS members?
As I have mentioned, I hope that the Members Council will be more accessible to members. It will listen, take the temperature on issues that matter to our members rather than being a board of directors who some feel are remote and less engaged with our members concerns and wishes.
What can those tuning in expect to see from this year’s AGM?
This year due to COVID-19 it has been necessary to conduct the AGM remotely. It is with great personal regret that we are having to do this, as the AGM has always provided the members with the opportunity to meet Directors and management face to face and for us to hear first-hand the tremendous work that we do. I always enjoy seeing old friends and meeting new members. Of course, this will also be our new chief executive Andrea C Martin’s first PRS AGM and so I feel particularly sorry that she will not be able to deliver the impressive 2019 results to a live audience.
Having said that, I know that over the past five months we have all become very adept at communicating online and I have no doubt that the technology we have planned will provide members with clear and easy access to our virtual AGM.
Due to the current COVID-19 pandemic, this year’s PRS AGM will be held online as a closed meeting. As such, voting members will not be able to vote in person on the day and are encouraged to vote by proxy in advance. This proxy will need to be registered before 12pm on Friday 14 August 2020.
