Merry Christmas to Peter Wilson. When it was suggested that Peter Wilson should be independent of the old board so that we can have a fresh start Peter responded with "That's your issue". Summary of the meeting here: viewtopic.php?f=23&t=594
A good summary of where we are up to by Joe Aston of the AFR, linked to from here: viewtopic.php?f=5&p=4137#p4137
If you are new to this website read the story so far: viewtopic.php?t=321#p1793
Check out some of the AFR articles, too many to list and check out some of the ABC reports: http://www.afr.com/business/accounting/ ... 215-h055ej http://www.afr.com/business/accounting/ ... 211-h02x1d http://www.abc.net.au/news/programs/the ... s,/8626662
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Brett's Update for week ending 21st July 2017

A weekly round up of the issues and progress
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Brett Stevenson
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Brett's Update for week ending 21st July 2017

Post by Brett Stevenson » Sat Jul 22, 2017 5:47 pm

Hi all,

I cannot see too many more updates coming from my hand after the depressing reading in the AFR of Ian McPhee’s approach with the Independent Panel Review. What a sham
Just a few things
1. Strategy from here on- force an EGM to remove the current six board members, and assist ASIC to pursue and act.
2. The Independent Whitewash - how depressing is this.
3. The secret Representative Council and the silent Divisions - why the concerns are there.

Strategy from here on. The strategy as I see it from now is pretty simple and straightforward to express but it will be hard to achieve.

i. Force an EGM to spill the current six board members.

To force an EGM we need 5% of voting members to sign a resolution calling for such an EGM with a resolution to remove the six current board members - Dickson, Wade, Petty, Portelli, Dolin and Youngberry. This will require about 6,000 members signatures.
To date there are a couple of groups collecting the email addresses of members willing to support such a resolution.
Can I suggest that either one or both of those groups actually draft the resolution to remove these directors, and then start to have the actual resolution signed and collected asap.
By just collecting email addresses of supporting members will just delay the whole process and there will be attrition. So can I suggest the groups distribute the resolution to remove these directors asap for signature.
I have not been involved in this aspect but clearly support their efforts, and will use some of the money collected to assist them in the regard. Can I encourage members to sign the resolution and please send to other members to get them to do likewise.
This is the only thing that will force the hand of the current board.
Once the requisite signatures are collected it will need to be lodged with CPA, and they have 2 months to hold the EGM to consider it. By that stage the new board members (8) will be in position so the need for an Interim Board will not be as urgent to maintain continuity of leadership.
To date I have been thinking along the lines of an Interim Board, as have another group, but it seems that time is running away for that possibility.
The common denominator and much needed action is for us to force the current six board members to be removed.
I’m sure the two other groups will be able to maintain the communication on this aspect, and clarify aspects which I have missed.

ii. Assist ASIC to pursue and act

I will be putting my efforts into assisting ASIC to pursue and act on these matters as many of them will involve serious legal matters which are beyond our capacity (cost, time & expertise wise) to act on. You will have seen in my last update that ASIC should become very involved in this for various reasons.
Part of this will also involve liaising with governments at various levels, but primarily at a federal level because this may involve not just regulation but legislation.
It seems to me that unless there is some form of censure and/or redress/legal action where warranted then it makes a mockery of what has happened. This is important, and I believe this is where the directors and officers of CPA Australia both current and past should be held to account for their actions.
So, we shall see.
Obviously it is not an area I can say a lot about in advance, and I don’t want to give any false impressions or raise unrealistic expectations. Just trying to be upfront and honest with you.

2. The Independent Whitewash (IW)

Why I think the Independent Panel is really serving the purposes of the current Board rump who’s goal is to ensure responsibility for the mess CPA is in is never sheeted home to those who have been responsible (i.e. the board and management of CPA Australia). Serving the best interests of CPA Australia, the profession and the membership seems to have escaped them all apart from in their rhetoric.

Let me encourage members to have a read of the announcement by Jim Dickson on 3rd July 2017 (A1) of the Independent Review, and also the terms of reference (TOR) included in that announcement. Both are attached.

Here is my summary of the emphases of both the documents, and we shall look in more detail at the specific terms in a moment. But ask yourself what really is the board saying to us when they announced this review?

Lets look at the announcement first (A1)
to include a comprehensive assessment of the governance of CPA Australia to undertake a fresh look at CPA Australia’s governance regime,“We cannot allow questions of governance to go unanswered. Members, staff and the Board all deserve a robust independent analysis of the questions and assertions that have been raised in recent times and CPA Australia eagerly awaits those findings,” Mr Dickson said.

The overall emphasis is that governance was the critical or focussed part of the review.

How about the terms of reference (TOR)?

This is split into three sections - the review, the objectives and the scope.
Firstly to conduct a review of claims raised by members and other stakeholders.
Keep that in mind, it is a review. Not to replace the board or management in their tasks.
What is the review to cover?
These include concerns relating to:
1. Governance…..
2. Remuneration……….
3. Marketing strategy and expenditure……..
4. Other matters the reviewers consider appropriate.

In other words these three areas were specified with an overall catch all for other matters, and it finished that section off with an instruction that governance structures are considered.
I think it is fair to say that these three specific areas have been selected (governance, remuneration and marketing) because they have been central to the concerns raised with a concluding phrase to ‘just make sure governance is covered’.

Secondly the objective is to ensure the reputation, accreditation and confidence of members are dealt with. That’s my summary of the paragraph but I think fair.

Thirdly it lists the scope which really says make sure CPA Australia are doing things right and legal, and make recommendations for improvements.

Then there are the two red flags.
1. Governance recommendations (including constitutional changes) are to be delivered to the AGM in April 2018. We perhaps know that will be a process that will take another 6 months after that to implement and change and on it goes. Mr Wade will finish on his terms in October 2018 which is about when any governance changes will be implemented practically. All very clever and the advisers who drafted this did the current board a great big favour.
2. The preliminary report to be delivered 15th September. That’s right, two weeks before new board members are appointed so the current board can then have their little censorious check on it and revise it accordingly. Again very clever by the advisers to help the current board.

And the one great big ‘watch out’ red flag
The panel will establish a consultative panel of Divisional Presidents, plus others as they deem appropriate.
I have just done a spreadsheet on all the divisional presidents and nearly every one of them has a long history of service in the Malley years (refer attached). My summary of that would be to say that the divisional representatives on the consultative panel is tainted by their ‘silence’ not only during the Malley decade but especially over the last 6 months when these matters were being exposed.
That’s what I call the the Independent Panel playing with a stacked hand. How very convenient and proper but it ignores the clear reality that these are the very people who should have stood up and didn’t.

In summary the announcement and the terms of reference had enough warning signals to make us be on guard. Governance, remuneration and marketing would be the definite big areas plus others as need be to give us cause for encouragement but the dates for the governance recommendations (AGM next year) and the preliminary report (15th Sept this year to the current board) were enough to say this looks troubling.
But we live in hope and trusted that the Independent Panel might live up to their over-the top credentials and eminence ratings to perhaps see through those red flags and really hit the issues.

Wow, how foolish we were to harbour such a hope.
I thought Ian McPhee’s answers to Edmund Tadros’ questions extinguished any hope we may have had. I thought Mr McPhees' earlier justifying of his glowing endorsement of Alex Malley’s book The Naked CEO as his way of ‘giving something back to the profession’ was a bit odd (perhaps an excuse that came from the bottom of the excuse drawer) but his response to the AFR’s questions just made me feel depressed.
He wouldn't be looking at governance issues now (too big a job) nor remuneration (too confidential) and really they had so much to do that they wanted to focus on resolving (not reviewing mind you) the professional indemnity insurance matter (which the highly paid CPA management and board have stuffed up big time).
It seems Mr McPhee sees the review panel as a defacto board and management to resolve the issues rather than being a panel to review and provide recommendations on the critical issues which have been exposed. It’s not as if they are starting from scratch.

Thanks for nothing Mr McPhee. You and your panel of experts have given yourselves pretty much a blank cheque to do as much work as you want so long as the critical issues of governance, remuneration and marketing are delayed as long as possible. Good for you and your panel and your consultative group of divisional presidents, and the current board of course, and I’m sure the CPA management. But for us members (or me anyway) this is just one massive disappointment and recognition that for all your money, and eminent CV’s and announcements, you have about the same credibility as the leadership of CPA Australia.
This is just one big waste of time. Thanks for nothing when really you could have done something really good, and quickly. Taking three weeks just to start shows where your emphases are I suggest.
For me, I’m going to call it the Independent Whitewash (IW)

Here we have our organisation in crisis with 7 of the 12 directors resigning (including the Chairman), the CEO sacked with a scandalous golden handshake ($4.9 million) that defies all common sense and reeks of legal action, a rump of a board endeavouring to protect themselves from being held accountable for the major issues that have been exposed over the last 6 months, and staying in power because of the recruiting of the Divisional President from the ACT Tim Youngberry.
Most of the issues have been exposed and written about not by the CPA leadership at either board, head office or divisional level, but by the media and ‘non-eminent’ members who have nothing to gain (as opposed to your ‘not prepared to disclose’ payment for your Panels work) but to restore some credibility into CPA Australia and the profession.
At the core of these issues was the virtual ‘gerrymandering’ of the leadership of the organisation beginning with corporate governance framework.
We have a senior and middle management who have ‘stuffed up’ big time in their normal responsibilities (think CPA Australia Advice, Professional Indemnity Insurance, self promotion of Alex Malley, sporting sponsorships of no relevance to us, membership information which is rubbery at best if not outright wrong etc.) and that is just for starters. And all this while being rewarded so handsomely that even words like scandalous and obscene do not quite capture it.
So what do the board rump do?
They announce an Independent Review Panel headed by persons who have cv’s of such eminence that all we can do is bathe in the light of their length and accreditation.

And what do we get?
Well just read Edmund Tadros’s article from his interview with Ian McPhee and his Independent Panels approach and it is all there in its depressing reality.
This will be a whitewash and the current board will go off sailing into the sunset after they have overseen the appointment of some new board members, censored the first report of the Independent Whitewash (IW) panel, and escaped any sort of realistic censure for their and others actions and behaviour.

Your Independent Review Mr McPhee is about as predictable as the sun rising tomorrow. Thanks for nothing. The one thing you will surely have been aware of is the need for urgent action because the current board and corporate governance framework at CPA Australia are shot through with weaknesses, and the leadership at CPA at both board and management level is a disgrace.
But urgency and focussing on the critical issues was not on your agenda.
Your approach is just a waste of everyone’s time.

This last 6 months has been tough going for many members to expose these matters so don’t expect any plaudits and ‘pats on the back’, from this one anyway, for taking all the ‘wind out of our sails’ and virtually stalling any real chance for effective and timely change.
The AFR article on Friday was the low point from my perspective in this whole saga.
I trust you enjoy the financial rewards of your efforts because I think you have blown away any sense of credibility and resolution that we thought this might provide.
I’m not such a great fan of ‘eminent’ persons.
Too much eminence for a journeyman like me to appreciate.


3. The Secret Representative Council and the Silent Divisions

I have done some detailed analysis (attached) of both of these groups. I have posted comments on the website which I shall repeat here because of time limitations.

a. The secret Representative Council
Given that all CPA Australia put on the website are the names of the current Representative Council, and not who they represent, I have done this little chart to identify who they represent, how long they have been there, and some salient comments.
All this points to a very obvious and troubling matter - just why does not the current board show who the Representative Council members represent, and to detail if the list on the website is the complete list or not.
It's almost as if this is secret society stuff.
And do you think ASIC or Mr McPhee would comment on this and force them to disclose what is patently wrong.
This is where the current CPA board and management (directors and officers is the legal term I believe) quite frankly would be up for oppression of shareholders but who has the money to take them to court over this?
Mr McPhee is too busy chasing the side issues, while ASIC are just doing what they do best which is to remain a mystery regulator. Who knows what they are doing?
So here we are as members having an organisation which is in crisis having 7 of its 12 board members resign over a three week period including the chairman, having the CEO terminated (with a scandalous termination payout $4.9 million), having a divisional president (Tim Youngberry) roped in to the board to provide a quorum, having so many major matters exposed over the last 6 months of the failing of the current leadership, and what is the rump of a board doing?
They are organising for the appointment (N.B. appointment not election) of 8 new board members by a representative council who supposedly represent us but what they represent remains a mystery to us because the current CPA leadership will not tell us.
Meanwhile Mr McPhee does not see the urgency of that matter. No he is chasing some other side issue that may be important but is hardly as critical as this. 
What could be more important than the appointment of new board members into an organisation in crisis under the oversight of a remaining rump of a board who are doing all they can to avoid any sort of investigation into their culpability and responsibility for what has happened over the last decade.
I still find it hard to believe. 
A representative council who is supposedly elected by us yet we do not know who they represent.
ASIC should be all over this. 
Mr McPhee should be all over this. 
The current Board and management of CPA Australia (all very very handsomely remunerated I should add just to keep some perspective on how much of a failure they are in terms of just very basic stuff) should be all over this.

But no, it is left to a few 'non-eminent' members to do the investigatory work to identify the problem and alert members.
Its a shambles and a disgrace, and Mr McPhee keeps banging on about understanding the members frustration and anger while he goes on doing everything he can to avoid confronting the real issues.
CPA has become a joke. 
Why do we even try. With this sort of leadership at regulatory, board, management and even outside professional levels we are being played for fools.
b. The silent Divisions especially Presidents.

This is why I am very skeptical of the use of the current Divisional Presidents on both the Independent Review consultative panel, and also as a possible Interim Board. Until very recently these people have been silent on these matters (and as my analysis shows) for many this goes back a long way into the Malley decade.
The current Presidents from Victoria, NSW, SA, Malaysia, China and NZ especially go back quite a long way in terms of they divisional involvement, but none of them really can say they are new to divisional work during the Malley decade.

I shall just copy my comments from the website so you can catch the drift of my skepticism.
I titled my comment: The CPA Divisions 2017. Their roots in the Malley Decade. Why I don't trust them.
I have attached a schedule in both PDF and excel format (so members can refine it as they wish) of an analysis I did of the current divisions and their roots in the Malley decade. My comments are at the bottom of the spreadsheet. I limited it to just the 2013 to now ( 5 years) but it’s good enough to get a feel for the deep roots and why I do not have a lot of confidence in the current Divisional Presidents in particular. Remember these are the people Mr McPhee is calling on to use as a Consultative Panel for his so called Independent review (I'm going to start calling it an Independent Whitewash -IW for short, from now on). 
One group is suggesting that we use the current Divisional Presidents to form a Interim Board.
Well I suggest you have a read of the attached analysis and I would think that is a bad idea.
Most of our current Divisional Presidents have long roots going back before 2013 (where I started the analysis from) in the Malley decade, and I cannot recall hearing peeky boo from any of them about many of the things that have been exposed over the last 6 months prior to now. I still would love to know if Mr Brooks the current Victorian Division President was the Mr Brooks who prefaced his Dorothy Dixer question at the Singapore AGM with the ‘there are no governance or remuneration problems at CPA Australia’. And also if he paid for his airfare or was it CPA who paid?
To me they have shown the same disregard and convenient silence that has allowed many of the things being exposed to have gone on. They were in positions to know a lot more and to ask questions and raise these matters well before now. 
There may be some fine people amongst them but they sure did not do what they should have on these matters.
To think that the IW (Independent Whitewash) is going to use them as a Consultative Panel is just indicative of what a whitewash this will be. 
Also in the excel spreadsheet is an analysis of the current Representative Council, and also a summary of the Board Committees over the years. I have commented on these before but sometimes it is worth reminding ourselves what a gerrymandered board we have had for so long.

Cheers

Brett
Attachments
terms-of-reference-v2.pdf
(165.77 KiB) Downloaded 73 times
announcement of review.pdf
(64.46 KiB) Downloaded 86 times
Governance Analysis in part.xlsx
(53.09 KiB) Downloaded 125 times
Divisions Malley Decade Roots.pdf
(38.42 KiB) Downloaded 209 times

passedfc
Posts: 113
Joined: Mon May 29, 2017 3:14 pm

Re: Brett's Update for week ending 21st July 2017

Post by passedfc » Mon Jul 24, 2017 3:42 pm

Very easy to get disheartened.... with the situation of the Review and McPhee.. and our time is running down to get numbers.
But as we know there is no other clean way to get this board out.
It still astounds me that the 5 board members can appoint an illegitimate 6th Director and march on with their greedy agenda.. paying now for a review of the shit they created, claiming they are best place to clean up their own mess . McPhee also goes on about the institutional knowledge... this is the point .. !!! only a forensic audit can clarify what crap these people have continued to perpetrate over the last seven years... the institutional knowledge many people have about a CPA that is run for the members exists... the Mallee 7 years need to be forensically audited , as i am sure there is more very dubious expenditure to be explained . The white wash review will do little for the CPA organisation other than to perpetuate the current corrupt regime until they all eventually disappear with a nice little sum of CPA cash... leaving the mess for others to deal with.
Petty.... September this year.. Wade next Year !!
And the representative Council !!! What the ???
This has to be the most incredible case of bad corporate governance an behavior of all time and will be the subject of many students to study in the future ... this is the only legacy left by the people involved in CPA over the last 7 years..
Membership growth ?? Is a lie
7 Directors ran like hell... they are pathetic..and are as culpable as the 5 left and the one pretender...
The two seniors executives should be ashamed of themselves and never be allow to hold such positions again.

skepticalcpa
Posts: 2
Joined: Mon Jul 24, 2017 10:39 pm

Re: Brett's Update for week ending 21st July 2017

Post by skepticalcpa » Mon Jul 24, 2017 10:46 pm

Hi! Newbie here.

Firstly, thanks to all for your time and effort in getting us this far.

Reading Brett's update this week is really disheartening. The arrogance on display, particularly with the continuing attempts to ignore members, is particularly frustrating.

If all else fails, are there any legal options for members to pursue (apologies if this has already been discussed)?

Time4Change
Posts: 104
Joined: Mon Jun 05, 2017 2:20 pm

Re: Brett's Update for week ending 21st July 2017

Post by Time4Change » Tue Jul 25, 2017 11:28 am

Hi Skepticalcpa,

Welcome on board. We are all surprise by our leaders at CPA that were supposed to set example for us, but obvious they are in for their own self. That is why we members need to act now because the longer we let it dragged the more damage it will do to the brand and its credibility, which takes time to rebuild.

Bear in mind that CPA has our surplus thus they won't go down without a fight or at least damaging the whole reputation of the association. Therefore we are asking full status members to spread the words out there as currently the only available is to spill the board as fast as we can. To do that we need each and every full status members support (well at least 5%) of voting members, but the bigger the number the more weight. Time is not in our favour and currently we have passed 50% of the spill motion number we need and we are still looking for the other 50% which is equivalent to 3000 voting member as we need 6000 voting members to spill the board. Here is the link https://www.surveymonkey.com/r/LMQZ775 can I encourage to to sign up if you haven't done so and please share with any CPA or FCPA that you know in your network.

There are legal avenues, but it is not that easy and we do not have the resources that CPA has which is of course members money but they will used for whatever the board need it for which is exactly what they have been doing for all those years.

skepticalcpa
Posts: 2
Joined: Mon Jul 24, 2017 10:39 pm

Re: Brett's Update for week ending 21st July 2017

Post by skepticalcpa » Wed Jul 26, 2017 12:25 am

Thanks Time4change.

I've already participated in the survey. I thought it wouldn't be too difficult hitting the 5% target but I guess that's not the case.

I sincerely hope that the FB page will move this forward.

incitem3
Posts: 17
Joined: Sun May 21, 2017 3:39 pm

Re: Brett's Update for week ending 21st July 2017

Post by incitem3 » Wed Jul 26, 2017 2:59 am

Hi Brett, I noticed your comment on Mr McPhee responses and wanted to understand what is happening with the independent review. You said,

" I thought Ian McPhee’s answers to Edmund Tadros’ questions extinguished any hope we may have had. I thought Mr McPhees' earlier justifying of his glowing endorsement of Alex Malley’s book The Naked CEO as his way of ‘giving something back to the profession’ was a bit odd (perhaps an excuse that came from the bottom of the excuse drawer) but his response to the AFR’s questions just made me feel depressed. "

Do you have a reference to this discussion so we can all understand what was said? ... Thanks

User avatar
Brett Stevenson
Posts: 450
Joined: Fri Mar 24, 2017 10:43 am

Re: Brett's Update for week ending 21st July 2017

Post by Brett Stevenson » Wed Jul 26, 2017 8:46 am

Ian McPhee downplays association with CPA Australia's Alex Malley
Jun 19 2017 at 11:00 PM | by Patrick Durkin, Edmund Tadros, Joe Aston

Former auditor-general Ian McPhee, part of a three-person panel set to review the crisis at CPA Australia, says he has only bumped into CEO Alex Malley at the occasional accounting function and endorsed his book just to give back to the profession. Despite Mr McPhee's personal endorsement in Mr Malley's book The Naked CEO that "many CEOs have taken a winding road to the top. Not everyone drove a bright-orange Datsun like Alex did", Mr McPhee played down his personal association with Mr Malley on Monday night.

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