The Queen was a diligent steward of her family's business affairs. Photo / AP
Queen Elizabeth II was one of the world's wealthiest individuals, with property holdings ranging from central London prime real estate to farmland across the country, but her ability to profit from, let alone sell, many of the assets over which she presided was limited.
Her father, King George VI, nicknamed the royal family "the Firm" and one former adviser to the family described the Queen as "very much the non-executive chair" when it came to business and financial affairs. But the Queen was unlike any chair of a conventional company, and her power to act like a normal company director, entrepreneur or investor was highly constrained by legislation and tradition.
She was the ultimate authority for important decisions about a royal household of more than 400 staff, from engineers to chefs, and oversaw the running and refurbishment of palaces that are among the most famous buildings in the world. Day to day, though, many of those decisions were taken by a network of courtiers.
The Queen's managerial style was unavoidably guided by the specific demands of constitutional monarchy and shaped by a gradualist approach to change that ruled out radical innovation.
One of the key questions facing her successor, Charles III, who as Prince of Wales was known for his hands-on approach and strong views on the environment and planning issues, is whether he will want to, or be able to, usher in a bold change to the way she conducted affairs.
What was often described, confusingly, as "the Queen's fortune" was in fact divided into a number of highly regulated areas, most of which were effectively beyond her direct control and now pass to her successor.
Her largest land and property holdings were managed by the Crown Estate, which belongs to the reigning monarch "in right of the Crown". The £15.6 billion ($29.6 billion) property portfolio includes large chunks of central London, such as Regent Street and St James's, as well as retail parks and countryside outside the capital. It also owns the seabed up to 12 miles (19.3km) out from the coast, the value of which has surged since 2021, thanks to the lucrative lease of seabed rights to develop offshore wind projects.
The chair of the Crown Estate updates the monarch annually on the state of the portfolio but, since 1760, the monarch has allowed the Crown lands to be managed on his or her behalf. Surplus revenue goes to the Treasury, which in return makes a fixed annual payment to the monarch, at first through what was known as the Civil List and, since 2012, via the "sovereign grant".
If the Queen had a mostly arm's length relationship with the Crown Estate, she was more directly concerned with the destination of the grant. In 2016, it was agreed that the proportion of Crown Estate revenue distributed to the monarch should increase from 15 to 25 per cent, mainly to allow for a £369 million ($700 million), 10-year refurbishment of Buckingham Palace.
A more direct source of independent income came from the Duchy of Lancaster, a private estate that has belonged to the reigning monarch since 1399. Its holdings cover 18,248 hectares and the Duchy's net asset value is £653 million ($1240 million). Those assets include farmland across Cheshire, Lancashire, Staffordshire and Yorkshire, commercial property — notably the Savoy estate in London — financial investments, farmhouses, homes, and mining and foreshore rights. The Queen's account, called the privy purse, benefited only from income from the estate, which in 2021-22 showed a net surplus of £24 million ($45 million).
It was this income that, in 1990, the Queen agreed should be used to pay for other members of the royal family. As part of a reform of the Civil List, only she, and, at the time, Prince Philip and the Queen Mother would receive money directly from the Treasury. In addition, she said she would pay income tax and capital gains tax on the Duchy of Lancaster and on other private investments, although the government agreed that "sovereign-to-sovereign bequests" would be exempt from inheritance tax. As a result, the Duchy of Lancaster passes to her successor untaxed.
Charles was an early advocate of the idea that the royal family should live off Crown Estate income. As Prince of Wales and Duke of Cornwall, though, he funded his public, charitable and private activities and those of his family from the revenues of the Duchy of Cornwall, a private estate set up by Edward III in 1337.
The Queen was closely involved in this critical phase of reform of the monarchy's finances. In 1986, a team led by Michael Peat of accountants Peat Marwick McLintock, the Queen's auditor, had reviewed the state of the royal household. Its report revolutionised royal finances.
The recommendations — 188 in total in a report running to more than 1,200 pages — improved efficiency and reduced costs. Ben Pimlott, in his biography The Queen, said the monarch's input was "small but notable" (she is said to have remarked "why have I got so many footmen?"). The changes stood her and the family in good stead when death, divorce, and scandal turned the public spotlight back on to how the monarchy was run in the 1990s.
• £15.6 billion ($29.6 billion): Value of property portfolio managed by the Crown Estate that includes large chunks of central London, such as Regent Street.
• £1.05 billion ($2 billion): Net assets of the Duchy of Cornwall, a private estate set up by Edward III in 1337. With the succession, management passes from King Charles III to his heir Prince William
• £653 million ($1240 million): Net assets of Duchy of Lancaster, a private estate that has belonged to the reigning monarch since 1399. Its holdings cover nearly 20,000 hectares
Peat, who went on to become keeper of the privy purse — the equivalent of the Firm's finance director — was also an invaluable source of advice on her personal portfolio. Another former member of the household recalled how she asked him some probing questions about her investments in start-ups at the time of the dotcom bust in 2000.
Her private holdings also included the palaces of Balmoral, in Aberdeenshire, and Sandringham, in Norfolk, the royal stamp collection (excluding Commonwealth stamps that she received and held on behalf of the nation), and her racehorses, in which she took a close personal interest, both for their performance on the racetrack and for their value as breeding stock.
Those who worked with the Queen were unanimous about her work ethic and efficiency. "The Queen's very businesslike. You send a memorandum and it's back the next day, or certainly within 24 hours," one ex-courtier told Andrew Marr for his 2012 book The Real Elizabeth. "She didn't micromanage, but she did take the decision in principle," another former adviser told the FT.
Decisions were carefully prepared by senior courtiers, who provided recommendations for her approval. "It isn't like any conventional organisation, where orders flow from above down," said one former adviser to the royal family, who described it as "decision-making by osmosis".
Lord Robin Janvrin, private secretary to the Queen from 1999 to 2007, said: "I would characterise her approach on every item as 'relentless common sense'. Of course she accepted a lot of the advice she got but if it wasn't sensible you jolly well knew it."
Although the Queen would always decide which events she should attend, she was well aware of the power of her office and the need to calibrate any other interventions carefully, particularly in business and financial matters.
Often, a mere inquiry from Buckingham Palace was enough to affect a decision. According to a court official, when the Crown Estate wanted to sell a block of affordable housing in London in the 2000s, worried tenants complained to the Queen. Two carefully worded questions from the monarch nudged the estate to sell at a discount to an appropriate owner. On another occasion, she made clear her unwillingness to let the Duchy of Lancaster offload agricultural land it had owned since the 14th century. "If it was good enough for John of Gaunt [Duke of Lancaster from 1362]," she remarked, "it's good enough for me."
As Prince of Wales and Duke of Cornwall, her son Charles demonstrated a more hands-on approach. He personally chaired the Prince's Council, or board of directors, of the Duchy of Cornwall, which recorded net assets of £1.05 billion ($2 billion) and a surplus of £23 million ($44 million) in its 2022 report. The portfolio includes most of the Isles of Scilly, large parts of Dartmoor and The Oval cricket ground in London.
He was also an active manager of the estate, used to meet all its main tenants in person, and earned the affectionate nickname "the boss" from staff, according to a 2019 ITV documentary. One Duchy employee described a work ethic similar to that of his mother, with Charles returning documents with his handwritten comments within days.
"It's the personal involvement and the personal touch and the understanding of people's families and their lives which is what matters so much in terms of management," Charles told the programme.
The Duchy of Cornwall now passes to his heir Prince William. Charles groomed his son to take over as steward of the 52,450-hectare estate, including land and property, mainly in south-west England, in contrast to what he described as a "baptism of fire" when he took over the Duchy in 1969, aged only 21.
Transferring a more active management style to his new role will be harder. As "the boss" of the whole Firm, the King faces more constraints on his interventionist instincts, as he has acknowledged. In 2018, Charles told the BBC that as sovereign he would have to "operate within the constitutional parameters". Asked if he would continue public campaigning as King, he replied "I'm not that stupid, I do realise that it is a separate exercise being sovereign."
The Queen also exercised her leadership as head of the family, another role that Charles has now inherited. During gatherings at Balmoral in the summer, or Sandringham at Christmas, she helped set the broad tone of discussion.
At a critical point in her reign, she oversaw attempts to take a more formal, strategic view of the future, guided and assisted by her husband, who played an active part in family affairs until his death in 2021. After the "annus horribilis" of 1992 — marked by the marital troubles of three of her four children and a devastating fire at Windsor Castle — the Queen was encouraged to set up what became known as the "Way Ahead Group", consisting of the core members of the family and senior officials. The group met regularly until about 2005, tackling longer-range issues, from the size of the official royal family to the Queen's role as head of the Church of England. As she grew older, she also made way for Charles, William and the younger members of the family to take up some of her public duties, in an example of sensible succession planning.
As head of state during a period when British business modernised its management and marketing, the Queen was conscious of the need to adjust and burnish the royal family's "brand".
That brand again came under pressure at the end of her reign as the spirit of renewal heralded by the 2018 marriage of Meghan Markle and Prince Harry disintegrated in public accusations and acrimony. The successful platinum jubilee celebrations of 2022 underlined how much of the family's reputation depended on her personal dedication and sense of duty.
Former courtiers have described the evolution of the monarchy's image under the Queen as a "Marmite jar" strategy, a reference to the imperceptible change in the design of the spread container, carried out so slowly that fans did not realise it had occurred.
"She would never do anything that was for quick, short-term benefit," said Sir Alan Reid, keeper of the privy purse from 2002 to 2017 and now chair of the Duchy of Lancaster's council. Yet she was not opposed to change that made sense and often disproved courtiers who assumed she would resist modernisation.
Referring to one of the most famous political rebrandings of her era, one person who worked closely with the Queen said she was conscious of the need to change, "but we didn't want [to create] 'New Monarchy' like 'New Labour'." According to this official, her approach to conserving and advancing the Firm was like that of "the Prince", in Giuseppe Tomasi di Lampedusa's novel The Leopard, who remarked: "If we want things to stay as they are, things will have to change." It now falls to a new generation, under Charles III, to deal with growing calls to accelerate that transformation.
Written by: Andrew Hill
© Financial Times
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