Wealthy families have very different attitudes towards petty pilfering by their household staff, in the same way that offices have varying attitudes towards theft of stationary and office equipment by their employees. It may seem ‘small beer’ and nothing to worry about, but small acorns can sometimes turn into giant oaks.
The prosecution of Paul Burrell, Princess Diana’s butler in 2002, and the subsequent outpouring of royal secrets by the aggrieved former employee, wrecked Prince Charles’s reputation and ruined his attempts to rehabilitate himself with Camilla in the eyes of the public. This would never have happened if he and subsequently Diana, had had a more rigorous rule in their households about petty pilfering.
According to Tom Bower, author of Rebel Prince, Prince Charles was allegedly ‘unbothered about pilfering by staff’. The royals receive so many things, many of which are neither liked nor cherished that Charles ‘randomly allowed his staff to sell unwanted gifts and keep the money. Rewarding his butlers and valets, he believed, kept good staff loyal…’ considering their low pay.
The matter of household theft came to the attention of the police, when a director of Spink ‘boasted while intoxicated at a party’ that he was ‘selling a two-foot gold and silver model of a dhow originally worth an estimated £500,000. The piece, he said had been a wedding gift from the Emir of Bahrain to Charles and Diana’.
On investigating further, the police found thousands of pieces including numerous family photos and letters to Prince William in Paul’s home in Cheshire which he had taken from Diana’s apartment in Kensington Palace soon after Diana’s death in 1997.
This is not uncommon.
In my book, ‘When you are Super Rich Who Can you Trust?’ I talk about a client who was elderly and receiving 24 hours care from a nurse. One evening, I saw the nurse dressed to go out to a function wearing one of my client’s brooches, which I asked her about. She said, it had been loaned to her for the evening.
On the death of my client, I was interested to note that the brooch was not part of my client’s estate, but there was no evidence to prove that the brooch had or had not been gifted to the nurse.
In contrast to the household of Prince Charles, the queen’s household, ‘itemised and stored away every gift at Windsor Castle as part of the Royal Collection, forbidding any sales’. There is nothing wrong with making a gift to a member of staff for them to sell, but if the donor genuinely wants the member of staff to get the best possible price for it, it should be accompanied by a simple Deed of Gift and recorded as such.
Some wealthy people may say that they cannot be expected to keep track of their personal valuable possessions. My answer to that, would be to transfer them into trust and make it a problem of the trustees!
If a member of staff pilfers a trust asset, the trustees will be liable to make up the loss if they were negligent in protecting their trust assets from such theft.
Similarly, trustees also have an obligation to make sure that all valuable trust assets are properly maintained – but there again, there are pitfalls.
A common situation, which I also refer to in my book, is where the captain of a yacht is in charge of maintaining the boat. Every year he may take it to his ‘favourite’ boatyard, which pays him a percentage of the work done - and for keeping quiet on the extent of the work.
When I take my car into the garage once a year, for a service and MOT, I trust the mechanic when he says I need new brake pads and windscreen wipers because, I do not know any better. So how is a boat owner going to know if the work listed as necessary really needs to be done, if the Captain and the boatyard are in cahoots?
Trustees in possession of valuable assets, have an obligation to maintain their assets, but not to pay over the top for doing so. They need to conduct a trust audit to ensure that all the trust assets are still there and in proper repair at a proper price. Every year or every other year they need therefore to carry out an independent asset audit, - and if they do not they could be liable to make good any loss or depreciation of value.
If you would like to buy Caroline’s book, ‘When you are Super Rich who can you Trust?’ or ‘How to Win business from Private Clients’ please go to www.garnhamfos.com or on Amazon, and if you would like to book a meeting with Caroline, call 020 3740 7422 or email on email@example.com