Today (2 June 2017) the Australian Financial Review carried front and back page articles on how pressue is mounting for senior CPA Australia executives and board members to stand down over outrageous pay packets.
Apparently the journalists had difficulty getting anyone to comment for the story, which detailed the contents of a 32-page report sent to CPAA members earlier this week. However, on shining white horses in rode WOB member, Marcia O’Neill FCPA, a former board member and Victorian Divisional President and yours truly, also an FCPA. The mild mannered accountant from Armidale, Brett Stevenson, whose investigations into the operation of the CPAA sparked members concerns, continued his commentary.
CPAA are the next in the line of professional bodies (after the Tax Institute and the Chartered Accountants ANZ) to do unto themselves as they would have others do and release remuneration information. As members of the ASX Corporate Governance Council, CPAA is now applying remuneration disclosure arrangements akin to what is required for listed companies.
So far, the CPAA President, Tyrone Carlin, who received more than $254,000 in director's fees since assuming the chair position on 1 October 2016 (the full year's salary is $390,657), has fallen on his sword. He stepped down in the spirit of renewal as suggested by WOB (and quite possibly many others). As Joe Aston in Rear Window (2 June 2017) reports, Prof. Carlin is employed full-time as the deputy vice-chancellor at the University of Sydney. This role prohibits him from spending more than 20 per cent of his time on externally remunerated activities, yet CPA external consultants have classified the President's role as taking 3.5 days per week. In addition he serves on the board of Teachers Mutual for which he receives $70,000.
Other board members are progressively retiring; Richard Petty in September 2017 and Graeme Wade (former chair) and Kerry Ryan in September 2018. Richard Alston, the former Communications Minister, is due to retire in the next few months.
As to the remuneration of the CPA board, at page 14 of the Information for CPA Australia members document, the remuneration of the President is $311,979 (such precision!). In addition said President receives $70,000 for sitting on the board of CPAA's loss-making fully-owned subsidiary, CPA Australia Advice, as do other board members. The CEO, Alex Malley, who also sits on this subsidiary, received an outrageous $1.786m in 2016.
It’s not clear if the CPA think they have a problem yet. It’s all the media they say. It’s only three members (those quoted in the AFR of 2 June 2017) complaining. WOB thinks not.
The question is what next? The CPA was (until now) a well regarded professional body. In an effort to insulate the organisation from ‘interest groups’ the board has become one itself. Unintended consequences have come to call and governance is misguided.
A couple of suggestions:
- Ensure the current director recruitment exercise is beyond reproach and completely transparent.
- Engage a well respected outsider to do a governance review. WOB can suggest a number of eminent female silks.
- Admit something is awry - if needed poll the membership, anonymously as it appears some are unwilling to speak out.
WOB is taking this issue up in the interests of good governance. Please drop me a line at ruth.medd[@]womenoboards.org.au with your thoughts.