December 2015

The Board hosted the second Foundation of Hearts Annual General Meeting at Tynecastle stadium on Thursday 3rd of December. Chairman Brian Cormack updated attendees on the Foundation’s year and this month’s blog is a transcript of his speech.

Chairman’s speech

Welcome
Ladies and Gentlemen, welcome to the 2nd Annual General Meeting of the Foundation of Hearts. My name is Brian Cormack and I am the chair of the Foundation. For those of you who don’t know me and expected Ian Murray to be here, so did we! We thought Ian would have plenty of time on his hands after the election in May. Apparently we don’t just save football clubs, we also save Labour MPs.

Quorum
During the day we need to conduct some formalities and the first one is to check that we have a quorum for the AGM. The quorum as per our articles has to be 51 members…that’s 5-1. I can clearly see that we have sufficient numbers so, I can officially declare the AGM open.

Ian Murray
Before I introduce my fellow Directors, I would like to thank Ian Murray for his service to the Foundation of Hearts. Ian stepped down as chair of the FoH and as a Director of the club due to his commitments in Parliament in June this year. Ian joined the FoH in 2013 at a particularly difficult time for the club just before administration. He helped bring the fans’ groups together under the FoH banner and guided the FoH through the period of the club administration. He was a very good speaker, a public face for the FoH and was always very professional. We wish him all the best in the future.

Thank Directors
I would like to thank the Directors of the Foundation for the tremendous amount of work they put in throughout the year. It is all done in their own time and for the love of the club.

Donald Cumming
Donald is a lawyer with CMS in Edinburgh. Donald led the FOH legal team as part of our bid to take the club out of administration with Bidco and Ann Budge. Donald joined the Board in October last year.

Garry Halliday
Garry was one of the founding members of FOH back in 2010. Garry is actively involved in all the marketing and is responsible for most of the fan reward ideas and Pitch Plot ceremonies, which some of you may already have enjoyed.

Alastair Bruce
Alastair has been part of FoH since nearly its inception. Alastair is our marketing expert who maintains the website and all of our social media activities.

Barry McGonagle
Barry is an accountant. He joined the board last year at the first AGM and was the first member to be elected from the wider membership. Barry has been an excellent find and he now presents all the financial information to the board on a monthly basis.

Marcia Campbell
I would also like to thank Marcia Campbell who has been a special advisor to the board for two years now. Marcia cannot attend today due to other business commitments.

Darren Johnstone
And finally to Darren Johnstone, a journalist, who has been helping us a lot with media and marketing issues.

FOH Report
As Chair of the Foundation of Hearts, I will give you the Annual Report. I have been involved in the FoH since 2010 and was one of the founding Directors. It is quite incredible how far we have come. The way everyone has worked together over this period has been exceptional. The backing from fans to buy season tickets, sell out home games, take monthly contributions to the FoH to an all-time high is the reason Ann felt confident to invest in the club in 2014. We must continue though as we are only one and a half years in to our five year plan. The support and trust you have shown to the Foundation has been fantastic and from the Board – I sincerely thank you for that.

Last year Ian said it had been a long tough 12 months for the club to come through administration off the park and to endure relegation from the top division and start in the championship. This year, by contrast, has flown by!!
One year ago, nearly to the day, we beat Rangers 2-0 here at Tynecastle, 14 games into our 20 game unbeaten run. The club went onto romp the league by 21 points from our nearest rivals to secure promotion back to the premiership where we belong. This season has continued in the same positive way with season tickets sales up on last year, home game sell outs and sitting 3rd in the league.

The Foundation has also had a positive year. Membership reached just over 8100 during the financial year. The average monthly pledge amount is also up from £15.50 to over £16.00. We have complied with the legal agreement with Bidco, have paid £2.4M to May 2015 and are on course to pay another £1.4M by May 2016. We have passed over 96% of all donations received which is also a stipulation of the agreement.

We said last year at the AGM that the issues we would be dealing with were member engagement, The Fan Reward scheme and working with the Club on the model for the transition to fans ownership. On the member engagement, we have progressed with quite a few initiatives. We send out a monthly newsletter detailing exactly what is going on with financial information, levels of pledge amounts and other issues we are working on to keep everyone informed. This was one of Barry’s commitments to the members when he became a director last year and it has been very well received. Thanks to the Club, we have also set up a stall at the reception area which is open before every home game. The directors are available to answer any questions, sign up new pledgers and generally be accessible to you – the members. I think this is one of the most important aspects of fan engagement, making the fans and the community feel that they are an integral, if not, the most important part of the club.

We are also engaging with members on social media in a positive way. We are very close to the club and to Big Hearts so we are constantly forging a stronger link as a community club. A Facebook post recently by the Foundation about the tribute kit had over 70,000 likes and over 2,000 comments from all over the world. Comments such as “this is how fans SHOULD be treated by their club”.

On a communication basis by email, we try to respond within a few hours to any requests/questions to our info@foundation email address. Again by making the effort to be accessible there have been some amazing stories. One gentlemen emailed in to say he was reducing his £20 to £10 and his wife would continue the payment as he didn’t have much time left on this earth. He sadly passed away the week after sending the email and I have since met his two sons, who are carrying on the Hearts tradition. We also had 13 year old Daniel Morrison who emailed in to say he would like to make a top up payment, Daniel had done some extra chores around the house and saved up £900 and wanted to donate it to the FoH. This is the young team that we want to be talking about as future Hearts fans.

Another couple of fan engagement initiatives that are ongoing are the FoH pin badges and the overseas ambassadors. We launched the Pin Badges a few months ago and the generosity shown by the fans has again been incredible. We have raised over £3,000 from the badges and a limited amount are still available. The overseas ambassador role is still evolving but we have around 25 members from around the world who have come forward to be part of this. We plan to get this information out in the coming months.

Bequest
Last year, a lifelong Hearts supporter passed away at the age of 93. He had not been able to attend matches at Tynecastle for a number of years, but his affection for the club was undiminished. In his will, he directed his executors to give part of his estate to a body which promotes the aims and objectives of Heart of Midlothian Football Club.

The executors gave careful consideration as to how they should implement these instructions, and they decided that payment should be made to the Foundation. The Foundation received a cheque for over £108,000 from the executors.
This bequest meant so much to us and the Club, and we can only express our deepest appreciation for the kindness and generosity of our benefactor. His gift reminds us yet again of how, in a quiet, unsung way, so many people are giving a helping hand to the club they hold dear. We had discussions with the Club and decided that assisting with the funding of the memorial garden at Tynecastle was a fitting way of putting the legacy to use.

Fan Rewards
We launched the Fans Rewards scheme back in January this year. The purpose of the reward scheme was to give acknowledgement to fans who were donating to the FoH and encourage members to continue to be involved for the full period of the agreement.

We tied the Fan Rewards to our 5 year plan where if you pledge £10 a month over that period you will receive a souvenir plot on the Tynecastle pitch behind you. Many members have already reached that total by pledging more each month and we have had 4 pitch plot ceremonies to date. We invite around 50 members plus guests to each ceremony and you receive your certificate from a player, the manager or even Ann herself. You have time to wander on to the pitch, get photographs taken on your plot and enjoy the experience. It is a joy to see all the members receiving this acknowledgement from the FoH and the Club. The feedback we have received has been excellent and every member will receive their plot certificate once the points total has been reached.

Our analysis to date shows in 2015 the cost to the Foundation of running the Fan Reward Scheme was 55p per member and we estimate that it has raised approximately £7.40 per member in increased contributions; which is over 1200% return on investment.

Throughout the period there are also other acknowledgements, notably the FoH Tribute shirt. This was launched officially 2 weeks ago and worn by the team against Motherwell last week. This has really grasped the imagination of everyone. The initial sales have been fantastic with the original order of 4000 shirts being close to sold out and a new order has been already been placed. It has been such a success and a great honour to think that the Hearts players ran out with 8,000 fans names of members who helped save the club. The Tribute Shirt came from an idea from a past FoH director Dougie Masterton and our marketing team worked with the Club to take this through to completion. The Club fully supported the initiative, especially at a time when the kit manufacturer was changing and is an example of our close working relationship.

Governance Update
In the final section of my report, I’d like to update you on the work we have been carrying out on future governance arrangements.

During this year, a working group, set up by the board and assisted by Professor Andy Adams of Heriot-Watt University, and with representation from the Club, has been examining different governance options. At this stage, this is clearly work in progress, but I’ll briefly describe some of the areas we have been looking at.

Appropriate governance arrangements need to be in place at both the Foundation level and at the Club level. At Foundation level, we believe our current constitution gives us a solid starting-point for our long-term arrangements. It already incorporates best practice from a wide array of resources, and we do not anticipate carrying out a fundamental redesign of it. But we are exploring a number of specific long-term design issues. For example, we are looking at whether we might introduce a membership forum or council to act as a consultative body to engage with the Foundation board.

We believe it is important that the Foundation board should have an appropriate mix of specific competencies, so we are examining whether a nominations committee should be established to evaluate the skills and experience of applicants for board membership. Another topic we are looking at is, what form the long-term fan funding though the Foundation might take. Work on these matters is continuing, and no final conclusions have been reached yet.
In relation to governance arrangements at Club level, it is clearly a matter for the Club to ensure proper governance is in place. At present, the Club is managed and run by an executive team, accountable to the Club board. The supporters’ interests are represented by the two FOH Board Members who sit on the Club Board. Those representatives are there to provide a blend of support and challenge and to contribute at the highest level to the strategic development of the Club.

In looking to the future, we are having an ongoing dialogue with, and listening closely to, Ann and her management team. We very much welcome the Club’s appointment of Martin Jesper as head of strategic developments. The Club has made this appointment specifically to ensure that senior resource is available to assist FoH and to provide a direct conduit into the Club at a senior level on a day-to-day basis. We very much look forward to working with Martin over the coming months.

I would sum up by saying that, at Foundation level, we want to encourage effective engagement and participation across the whole membership of the Foundation, by creating governance arrangements which are practical, simple and clear, and command the confidence of our members. At Club level, governance arrangements must respect the role and responsibilities of the management team, help to maintain long-term financial viability and provide a platform for constant and sustainable football success.

I know not every member has a deep interest in studying organisational structures, but designing our future governance arrangements is important. If we get it right, we’ll go a long way to ensuring that the Club can never again be controlled by any one individual.

The Coming Year
So during the coming year we will continue with increased fan engagement and the rewards scheme. We have two main issues to focus on, maintain and increase the membership so that we fulfil the agreement and work on the governance model. We have done fantastically well over the past 18 months but we still have 3 and a half years to go to complete the 5 year plan. It is a challenge to continue to meet the targets set out in the agreement but if we work together this can be achieved.

What do we want as Hearts fans at the end of the 5 year period and beyond? A Club that is never again put in danger of going out of business. A Club that is managed to the highest standards with financial stability and sustainability at the core. A Club that is playing at the top of the Scottish game and challenging for trophies. A Club that invests in youth and is at the heart of the community.
I believe that is the goal and if we continue supporting the club as we have, how far can we go? Could it be that the club continues to receive additional revenue through the FoH from the fan base for life? That is a decision to be made as we move forward.

It has been a fantastic year for the Foundation, the loyalty and support of the fans has been incredible and everyone in the room should feel very proud.
Brian then proceeded to introduce Ann Budge who presented on behalf of the Club. He then laid the annual accounts before the meeting for member’s questions.

Two questions were raised on the day and one subsequently. These, together with the Foundation’s response, are listed below:

1. It was suggested that the FoH could be doing more in terms of marketing, specifically having more of a presence on match days across the stadium. We have considered this previously and welcome the suggestion. We are looking into the possibility of having volunteers around the stadium on match day rather than only using the match day stall.

2. It was suggested that the FoH should consider allowing pledgers to increase their pledge by small 10% increments. We are in discussions with GoCardless to explore the possibility of adding a simple button to the website and are currently working though the technological steps required to bring this to fruition.

3. I was queried whether we should be pushing to accelerate purchase of the shares from Ann. The FoH Board has always been clear in its view that acquiring a controlling interest in the Club is a five year process. This is central to our agreement with BIDCO. The timeframe allows Ann and her executive team to rebuild the Club back to the institution we all want it to be. It also affords the Club and the FoH sufficient time to forge an ever closer working relationship such that when the five years come to an end the transition of ownership is seamless and the Club can continue to flourish. We are therefore of a view that we should stick to our five year plan and that any steps to alter this timeframe would not be in the best interests of the Club or the Foundation.

New Director
We now move on to the final formal part of the AGM.

Over the past few weeks the members have been voting to elect a new Director to the FoH Board. We ensured the independence, management and efficiency of the whole election process – and it’s reporting – by commissioning the Electoral Reform Services to run this professionally on our behalf. We have had 4 nominations and all were of a very high calibre. Thank you to Andrew Burton, Scott Culbertson, Keith Sorbie and Louise Strutt for putting themselves forward and conducting a well fought election. All candidates have been canvassing through the ERS website, social media and fan forums. The vote closed at 12 noon on Monday 30 November.

There were 8037 members eligible to vote and we had 1210 votes cast.
The new director received 46.5% of the votes cast
I would like to welcome the new Director up to the stage to have a brief interview with our host Willie Hunter
Ladies and Gentleman, the new elected director of the Foundation of Hearts is Louise Strutt.
Thank you very much and we are looking forward to working with Louise over the next few years.
That is the formal part of the AGM complete.

Brian concluded by thanking the following people:
• Thank you to Ann Budge for her contribution.
• Thanks to the staff today in the Gorgie Suite.
• Thank you to Willie Hunter for hosting today.
• Thank you to the pupils of Tynecastle High for enrolling everyone.
• Thanks to Steven Campbell of Scott Moncrieff.
• Thank you to all the members for coming along today and see you all next year.

We hope you enjoyed reading our December blog and welcome any comments.

On behalf of all the Directors have a fantastic Christmas and a Happy New Year!

4 thoughts on “December 2015”

  1. After team display against Aberdeen really looking forward to game with Hibs IF we can keep up the high performance shown in last game should go far in cup and maybe beat Aberdeen to second place in league Lets get behind team for rest of season

  2. A thoroughly impressive AGM as last year. I was disappointed when Ian Murray resigned but his replacement and all the directors seem highly capable. Good to elect a new member in Louise Strutt also so congratulations to her. Hopefully we can increase membership in the next year. Maybe a 2nd place finish and Cup win would help in this?

    Yours in Hearts

  3. Good result against Celtic A win on Wednesday would be a great way to end the year All the best to all at hearts for the New Year And lets hope the supporters have a great year as well

  4. I could not make the AGM this year but it sounds pretty much like everything is on track and the Foundation continues to flourish as does the club. Keep up the good work and well done Barry and the rest of our foundation directors. Finally congratulations to Louise Strutt on becoming a director of FoH.

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