CPA Governance is a live case study and highlights a place where WOB members may find themselves at some time in their board careers. See my
previous article on the matter for context.
The CPAs seem offended that a member has called them out on their strategy and their interpretation of what is in their member’s interests. This mild mannered accountant from Armidale, Brett Stevenson, fired the opening salvo in the battle over how the CPA is governed, in the form of a 1400 word email. He is quoted on his
LinkedIn page as saying:
"
I'm doing this because it's the right thing to do. Without wanting to sound too pompous, sometimes you have to take a stand in the face of what to me are such glaringly blatant wrongs."
The story so far
- CPA Australia has for a number of years adopted an active marketing campaign for brand recognition and membership recruitment under CEO Alex Malley
- Success has brought confidence, money and unintended governance consequences in the form of what looks like excessive payments to key management personnel, as well as the cult of the celebrity CEO. The President (chair of board) is potentially earning $423,000 for what is 1 day per week of effort. He is a full time senior academic at Sydney University. The CEO could well be earning $1.5m per annum.
- The AGM was held in Singapore last Thursday evening. Your scribe listened in. The President gave a robust defence of their strategy, their CEO, their governance, their minimum disclosure re-remuneration and their commitment to global domination of the accounting membership space.
- At the AGM two ‘not in the tent’ questioners said that a request was being made in accord with the law for the release of board remuneration information. Also in accord with the law a request had been made (and CPA had provided) the full list of CPA members; but without effective contact details.
- Following the AGM an extraordinary email was sent by CPA to all members, thereby alerting all of the membership to the issue. It claimed improper behaviour by one of the membership – presumably the mild mannered accountant from Armidale. The behaviour attributed was nothing short of scandalous, they said. Unfortunately this ‘fake news’ was easily rebutted – by the AFR the next day. So much for a well run and disciplined CPA organisation. Is it adopting the ‘marketing at all costs’ approach with members one asks?
What is to be done?
This is a technical governance question. Here are a few 'white hat' suggestions:
- Release the remuneration information sought at the AGM, at the same time announcing a review of the constitution. This review to be informed by a cross section of interested members.
- The effectiveness of the Nominations and Remuneration committee looks to be in doubt. What about adding some externals who can add some credibility and /or tighten up its terms of reference.
- CPA to take action to move the board from siege mentality toward greater openness and transparency.
- Review the recruitment process for new directors – consider additional non member directors or non member directors of board committees.
- Some of the board members and the CEO to graciously step down in the interests of the organisation.
Over to you, CPA Board.