Lessons to be learnt from the thefts at The British Museum
The British Museum has received increased scrutiny since the theft of approximately 2,000 artefacts from its collections - worth millions of pounds - was made public on 16 August. Something its chair of trustees, George Osborne, referred to as “an inside job”.
The alleged “inside man” - a senior curator who had worked for the Museum for approximately 30 years - has been dismissed. The police have launched an investigation, and an independent collection, security and governance review is being carried out at the request of the Museum’s board of trustees.
Alison Jones, senior associate in our charities team, reflects on what we can learn and discusses the recommendations for charity trustees to put in place to help safeguard valuable assets.
Background
It has recently transpired that the thefts may have taken place over a 20 to 25-year period, and that back in 2021 the Museum was alerted to the thefts by a reputable antique dealer.
However, the alert was allegedly dismissed by the then Museum’s director. He resigned earlier this year when the thefts became public, shortly followed by the Museum’s deputy director.
Why the Museum and its trustee board did not act sooner is a pertinent question for the Museum to answer and for the independent review to properly address.
What are the key duties that trustees of charities which hold valuable collections/ assets must comply with?
Trustees of charities have 6 main duties, namely to:
- Ensure their charity is carrying out its purposes for the public benefit
- Comply with their charity’s governing document and the law
- Act in their charity’s best interests
- Act with reasonable care and skill
- Ensure their charity is accountable
- Manage their charity’s resources responsibly
The last duty is particularly relevant here.
Charity Commission guidance warns that charities are likely to be susceptible to fraud, theft, or other kinds of abuse, if trustees do not put appropriate procedures and safeguards in place to, for example, avoid exposing the charity’s assets and reputation to undue risk.
Trustees must also take reasonable steps to ensure that those procedures and safeguards are followed. In order to assess what procedures and safeguards to put in place, charities should draw up a risk management model addressing issues such as:
- What risks are the charity exposed to? In other words, what things could go wrong?
- How likely is it that each of those risks will materialise?
- If a risk materialises, how serious would it be? What would the impact be?
- What steps could be taken to avoid the risks identified? Can each risk be minimised? Can the risks be insured against? Could any of the risks be accepted/tolerated if they were to materialise?
- What is the board’s risk appetite and does this change according to the nature of the risk and its impact on the charity?
The risk management model should be periodically reviewed, monitored and updated as the risks facing the charity change over time.
Charity Commission guidance also recommends that charities:
- Maintain an asset register of all of their assets, to include the cost or value of each asset and enough detail to enable each asset to be identified
- Regularly inspect their assets to ensure that they still exist, are in good repair and are being used appropriately
- Authorise the disposal of assets appropriately and record this in accounting records and update the asset register
- Regularly review their insurance cover to make sure it is adequate
Whilst the above recommendations are made in the context of fixed tangible assets, we consider them to be equally as relevant to moveable tangible assets, such as valuable collections, in light of the issues arising at The British Museum.
The Museum has announced that it is going to digitise its collection - which could take five years to complete with 2.4m records to upload or upgrade - so that more accurate accounts of items can be kept and another similar issue (hopefully) avoided.
Charity Commission guidance also warns that things can go wrong when trustees place too much reliance on individuals, and do not implement sufficient safeguards to ensure accountability.
This can result in the charity falling victim to fraud or theft and cause the charity serious reputational harm and other damage. It seems that The British Museum has taken heed of this.
When asked about the steps the Museum had taken to stop something similar happening in the future, the new interim director of the Museum, Mark Jones, told MPs: “We have changed the rules governing access to strong rooms: now there is nobody who is allowed to go into a strong room on their own and that, with a whole lot of other measures, should ensure that the kind of theft that has happened couldn’t happen again.”
Whilst we would hope this kind of theft does not happen again, it is almost impossible for charities to completely mitigate this risk.
What if something does go wrong?
It is crucial that any wrongdoing is reported as soon as it comes to light and is reported internally through the proper channels rather than being leaked to the press.
That way, the charity in question can focus its efforts on seeking to minimise the impact of the wrongdoing and on promptly putting in place steps to protect its assets and a PR plan to protect its reputation.
Fostering a culture of openness and respect is therefore incredibly important, as is having an appropriate whistleblowing policy in place which all staff have been trained on and are familiar with.
The British Museum now has a new whistleblowing policy so that if an external person were to contact the Museum with concerns in the future, just like the reputable antique dealer did in 2021, then it would be appropriately escalated and handled.
In The British Museum’s case, it would be escalated up to the director and chair of trustees. The board of trustees would also be informed.
If a crime has been committed, it goes without saying that it should be reported to the police. The trustees will also need to consider whether a serious incident report should be made to the Charity Commission. A serious incident is defined as an “adverse event, whether actual or alleged, which results in or risks significant:
- Harm to a charity’s beneficiaries, staff, volunteers or others who come into contact with the charity through its work
- Loss of a charity’s money or assets
- Damage to a charity’s property
- Harm to a charity’s work or reputation.”
“Significant” means significant in the context of the charity in question, taking account of its staff, operations, finances and/or reputation.
Finally, when the Commission investigates cases of potential misconduct or mismanagement in the management and administration of a charity, it may take account of evidence that trustees have exposed the charity, its assets or its beneficiaries to harm or undue risk by not following good practice, a factor which could, in the more serious cases, lead to the disqualification of trustees.
Concluding remarks
There are lots of lessons to be learned, not just for the Museum itself but for the charity sector as a whole and in particular for those whose role is to safeguard valuable assets and collections.
Prevention is certainly better than cure, particularly when it comes to instances of theft of charitable assets. Whilst The British Museum reflects on its own policies, procedures and practices, it is an opportune time for other charitable organisations to follow suit.
For more information or to discuss any of the issues arising in this article and how our charities team can help you, please contact Alison at [email protected] or on 0191 211 7930.