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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CPA Board Update 9th Feb 2018 Consultation Forums

Discussion about the proposed resolutions to be put to the AGM in May 2018
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Brett Stevenson
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CPA Board Update 9th Feb 2018 Consultation Forums

Post by Brett Stevenson » Tue Feb 20, 2018 11:11 am

Hi all,
I have promised to place up on the website the Board Notice to members on 9th February, which I have below.
I encourage you to refer to the actual email as it has the links to the various other documents referred to in the memo.
Also take note of the Consultation Forms with members in March and April to provide feedback as members to the board.

I think it is important you also are aware that many of the consultation forums are after or very close to the cut off date (21st March) for members special resolutions to be raised at the AGM. So just be aware that you can provide the feedback at the Forums but after the 21st March you have no real opportunity to make any changes for resolution at the AGM. So, if you feel strongly abut any issues I would encourage you to communicate that with the board and the divisional councillors now, after the 21st your powers are extremely limited. The Board can say they have consulted and can draft changes up until beginning of May. We are in a poor position to make changes unless we act before the 21st, so just be aware of that.

I have already sent out special resolutions for signature on setting maximum directors fees very different to the ones proposed by the Board in this Notice from them, and also a resolution to limit directors tenure to six years rather than the board proposed nine years.
I am also sending out a special resolution (draft only has been sent to date) on members being able to vote directly for the Board which again is at odds with the Boards stated position.

Cheers
Brett
Dear Members,

Your new Board is continuing with its comprehensive work program for a range of member related initiatives, and also concerning some past issues facing CPA Australia. The Board met in Melbourne last week and we would like to provide you with an update on a number of important items.
1. Meeting with Divisional and Branch Council Presidents
2. Implementing Independent Review Recommendations – Release of Issues Paper
3. Potential for Legal Action
4. Director Remuneration
5. CEO Recruitment
6. Corporate Strategy Review
7. CPA Australia Professional Standards Scheme
8. Policy change

To watch a video update from President & Chairman, Peter Wilson click here.
1. Meeting with Divisional and Branch Council Presidents
One of the recommendations from the Independent Review was to establish a Council of Presidents to improve members’ ability to engage meaningfully with the Board on CPA Australia’s strategy and other relevant member issues.
The Board is very supportive of this recommendation and initiated it through the invitation of the Presidents of all Divisional and Branch Councils to a meeting in Melbourne head office on 29 January 2018.
It was a very open and productive day. The Board sought feedback from the Presidents on the Issues Paper that sets out the recommendations from the Independent Review and the options for implementation. The feedback has been incorporated into the Issues Paper which is being made available today for all members to consider and comment upon, as appropriate. This Issues Paper is discussed further below.
In addition to discussion on the Issues Paper, each President provided an overview of the key matters of importance to their Division or Branch, early results from the member survey were shared, and strategic workshop sessions were conducted to capture the views of the Presidents in relation to the development of the new corporate strategy.

2. Implementing Independent Review Recommendations – Release of Issues Paper

On 15 December, the Board provided its response to the Independent Review recommendations. Included in that response was a commitment to provide members with an issues paper providing more detail on the implications of implementing the recommendations.
The purpose of the Independent Review was to enable CPA Australia to adopt a more contemporary and balanced set of governance arrangements in response to member concerns.
Many of the Independent Review Panel’s recommendations require a reduction of the Board’s powers and those directly exercised by the chief executive, in favour of powers exercised by Divisional Councils directly elected by members.
The intent of these recommendations is supported by the new Board of CPA Australia.
Many of the recommendations will require changes to CPA Australia’s Constitution, By-Laws and Charters.
The Board’s primary objective in taking changes forward to the AGM is to achieve outcomes that are in the overall best interests of all CPA Australia members.
The Board is calling for member input on how best to implement the proposed changes. This is a genuine opportunity to reset our governance structures.

The Issues Paper is now available for member review and comment.

Members can share their views through the following avenues:
Divisional and Branch Councils
Member Consultation Forums
CPA Australia Website

Divisional and Branch Councils
Members are encouraged to contact their representatives on Divisional and Branch Council to share their views on the issues paper. Details of the members of Divisional and Branch Councils are listed on CPA Australia’s website.
Representatives from CPA Australia’s Board will attend Council meetings over the next few months to hear directly from Councillors on member feedback received.

Member Consultation Forums
Member Consultation Forums have been scheduled throughout March and all members are invited to attend. Representatives from CPA Australia’s Board, along with representatives from Divisional or Branch Council will be in attendance.
Dates and locations for the Member Consultation Forums are available here.
The Forums are an opportunity for all members to ask questions and put forward their views on the issues paper in a face-to-face setting.

CPA Australia Website
Members are also able to use the CPA Australia website to provide comment on the issues paper.

Pathway to the AGM
Feedback will be used to shape the final motions for Constitutional change. Finalised motions will be included in the Notice of Meeting that will be sent to all members towards the end of April.
Members will then make a determination on the motions at the AGM on 22 May in Melbourne.
Key dates and more information about the AGM are available here.

3. Potential for Legal Action
The new Board is acutely aware of the deep disappointment, hurt and anger felt by so many members in relation to the circumstances leading to the termination payment of the previous CEO.
In our communication to you on 15 December 2017, we advised we had made our own inquiries in relation to the termination payment to the previous CEO.
Similarly, the new Board has undertaken our own inquiries about the duties of the former directors.
The Board, through myself as President and Deputy President Merran Kelsall, have met with partners in a leading law firm and with Queen’s Counsel.
The Board is of the view that there is no basis to take action against CPA Australia’s past directors.
Having reviewed the circumstances of these events during 2017, the new Board understands the strong concern that many members feel having been put through this experience. The new Board would like to express its sincere regret to all members about these matters, and also assures all members it will vigorously pursue the necessary governance and constitutional changes to avoid any risk of these matters recurring in future.
Further we commit that we will continue to work in the overall best interests of all CPA Australia members.

4. Director and Executive Remuneration
When the nine new Directors were appointed in October, we approved independent benchmarking for director and executive remuneration.
External benchmarking experts, the Godfrey Remuneration Group (“Godfrey”), were appointed.
The Board notes the Independent Review recommendation that appropriate member-based organisations should be included in the benchmarking comparator group, however the Board has determined it would like to go further and only have member-based organisations included in the benchmarking comparator group.
Godfrey invited 27 member-based organisations to share their information on a confidential basis to allow a comparator group – the “Mutual Survey Group” - to be established. Of these, 12 organisations agreed to participate by the end of 2017.
Godfrey also referenced a group of 20 ASX listed Companies, however the Board advised Godfrey it wished to benchmark its remuneration solely on the Mutual Survey Group.

External Advice
A letter from Godfrey detailing their advice can be viewed here on the website.
The Board also sought a second opinion on the external benchmarking work to ensure the outcome was reasonable.
A letter from PwC detailing its advice can be viewed here on the website.
Both organisations see the Director remuneration levels determined as fair and reasonable, against this relevant market standard for CPA Australia.

Action taken
Director remuneration has been set at $75,000, a 24 per cent reduction on the previous remuneration level. This is comparable to the mid-range of the Mutual Survey Group, sitting just above the mid-point.
The Deputy President roles have been set at a 1.5 multiple on the basic Director fee and the President and Chair role has been set at a 3 multiple on the basic Director fee. Both multiples reflect benchmarks in the Mutual Survey Group.
More detail can be viewed in the Godfrey letter here.
These figures are inclusive of superannuation and will be back dated to 1 October 2017 when the nine new Directors were appointed to the Board.
Directors have not received any remuneration from CPA Australia since 1 October 2017 while this independent benchmarking process was underway.
The Board has also determined that no committee fees will be paid to any directors. Where a non-director is a member of a Board committee they will be entitled to a per diem amount. For the Independent Review Implementation Committee, Divisional Presidents seconded to this committee are entitled to receive a per diem amount of $2,300 per diem, capped at 20 days in total and to apply throughout 2018.
The Board has also determined that as from January 2018, no directors of CPA Australia are to sit on the Boards of any CPA Australia subsidiaries.
Remuneration levels for the CPA Australia Advice Board have also been set at a lower level and the higher duties allowance associated with CPA Australia Advice where it existed for selected senior executives at CPA Australia (e.g. the two COO roles at $185k) has been removed.
2016 CPA Australia Board Remuneration
2018 CPA Australia Board Remuneration
Number of Directors
12
9
Total Board Rem
$1,459,397
$900,000
President & Chair
$311,979
$225,000 – 28% reduction
Deputy President
$129,991
$112,500 – 13% reduction
Director
$98,604
$75,000 – 24% reduction
Benchmarked against ASX listed companies
Yes
No
Benchmarked against membership-based organisations
No
Yes
Directors remuneration as stated above inclusive of salary and superannuation components
The Board has also set the market median as the remuneration benchmark mid-point for executive roles going forward. In previous years, higher benchmark reference points were used to set executive pay levels.

5. CEO Recruitment
The process is well underway. By mid January, the Board received a final long-list from the external executive search firm containing a number of very high quality candidates. The Board is trimming this down to a short-list.
The Nominations committee (a sub committee of the Board) will start interviews at the end of the month and these are expected to extend into March.
It is expected that the full Board will meet with the top 2-3 candidates in April before making a final decision.
The timing of the appointment will be dependent on the outcome of that process.
When the new CEO is appointed, and following negotiations in the best interests of the organisation and all members, the remuneration package for that role will be disclosed.

6. Corporate Strategy Review
As noted earlier, the Board and Divisional and Branch Presidents participated in a strategy workshop on 29 January.
There is clear agreement that the success of our members must be at the centre of our future strategy. We do not believe the former vision of seeking to be the best professional services association in the world reflects what our members want us to be.
The Board is meeting with Divisional Councils over the next few months and a series of focus groups with members will be held throughout February, to further develop our new corporate strategy centred on our members.
More information can be found on the website.

7. CPA Australia Professional Standards Scheme
In late December, the Professional Standards Council (PSC) advised it had approved CPA Australia’s application for a new Professional Standards Scheme for recommendation to the relevant Ministers in each State and Territory for gazettal.
This new Scheme has now been gazetted in each state and territory and has commenced in every state and territory except Tasmania (21 February commencement date) and Victoria (19 March commencement date).
Members in public practice are encouraged to visit CPA Australia’s website to access support material and resources in relation to the new Scheme.

8. Policy changes
The Board’s Audit & Risk Committee has resolved to review the organisation’s whistleblower policy and, as a priority, establish an external concern reporting mechanism.
This work will be undertaken with regard to recent events within our organisation and forthcoming legislative reforms and best practice.
As part of our review of governance the Board is looking at initiatives to address inclusion and diversity. We will have more to announce in these areas in the next two months including changes to existing, or creation of new, policies.
The Board hopes the above provides useful information for our members.
We encourage you to review the issues paper and provide your feedback either through your Council, by attending a Member Consultation Forum or through the CPA Australia website.
It is important that all members have their say in shaping the future governance structures of CPA Australia.


Peter Wilson AM FCPA
For the CPA Australia Board of Directors

alizzia
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Joined: Mon Jul 03, 2017 5:04 pm

Re: CPA Board Update 9th Feb 2018 Consultation Forums

Post by alizzia » Tue Feb 20, 2018 2:01 pm

Agree with your Brett. The protracted manner in which CPA Australia has scheduled these forums puts members on the back foot.

In Peter Wilson’s message of 15 December he states forums would be conducted in February and March, and finalized motions for the 2018 AGM will be sent to members in April.

These statements were made in his video message at URL:
https://www.cpaaustralia.com.au/media/m ... ember-2017

The facts are zero forums have been scheduled for February. Some are to be conducted as late as the 4th week of April at a time finalized motions will already be in the mail to members. I let my Division know that words and actions do not match.....awaiting their response.

JWheldon
Posts: 367
Joined: Wed May 24, 2017 6:43 pm

Re: CPA Board Update 9th Feb 2018 Consultation Forums

Post by JWheldon » Tue Feb 20, 2018 5:12 pm

They are really concerned with the preparation of the 2017 financial accounts and the rest is just a side distraction.

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Brett Stevenson
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Re: CPA Board Update 9th Feb 2018 Consultation Forums

Post by Brett Stevenson » Tue Feb 20, 2018 7:31 pm

I hear what you are saying JWheldon but surely the preparation of the annual accounts cannot be seen as wagging the tail of the organisation. We all appreciate its a job, but really with all the very well paid staff they have lets not be too quick to dismiss their delays.
My advice (for what it's worth) is to go for full disclosure and not try to polish the rock too much. It's possibly a new experience for them, and perhaps that is the concern.
Just tell us how much the Independent Review cost, and international travel. Actually I reckon they could possibly work from the major expense categories in the Trial Balance and run with them rather than I'm sure their normal approach of trying to figure out how to group them together into almost meaningless totals of expenses - I think last year 4 line items covered over 90% of the expenditure, and we all know what that hid.
Openness and transparency takes away a lot of the stress and pressure (if everything is kosher of course).
If they fall back into the minimum disclosure mentality then what has this all been about?

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The Nude CPA
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Re: CPA Board Update 9th Feb 2018 Consultation Forums

Post by The Nude CPA » Wed Feb 21, 2018 12:33 pm

Brett Stevenson wrote:
Tue Feb 20, 2018 7:31 pm
Just tell us how much the Independent Review cost, and international travel. Actually I reckon they could possibly work from the major expense categories in the Trial Balance and run with them rather than I'm sure their normal approach of trying to figure out how to group them together into almost meaningless totals of expenses - I think last year 4 line items covered over 90% of the expenditure, and we all know what that hid.
Exactly.

"Creative grouping" might work with other professional associations, but they're not fooling an organisation of professional accountants.

We all know how easily detailed reports can be produced.

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