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
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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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Presentation on Corporate Governance CPA Style 19th Oct 2017

Discussions about the constitution and how CPA Australia is run
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Brett Stevenson
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Presentation on Corporate Governance CPA Style 19th Oct 2017

Post by Brett Stevenson » Fri Oct 20, 2017 3:48 pm

I have attached my presentation to the CPA Governance and Strategy Discussion group meeting last night. Also some associated handouts. It was great to meet many of the members concerned about these issues at the meeting, many of whom have been very outspoken themselves.
In summary I was trying to convey that CPA Australia has set a very low bar and poor example of corporate governance over the last ten years for an organisation which purports to be a standard setter.
I called it a case study of Shirkers and Looters? which refers to the common agency problem in corporate governance of the board and managers ('controllers' of CPA) not acting in the best interest of the members ('owners' of CPA). Terms that I borrowed from Bob Baxts Company Law text to describe this problem.
In effect the board and senior managers of CPA Australia have a duty and responsibility to 'look after' and manage CPA Australia. To do that they have been very handsomely rewarded. Very very handsomely rewarded. So handsomely that perhaps scandalously so is a better descriptor.
So they certainly were happy to receive the reward for their efforts.
But the other side of the 'deal' is that they are to be held responsible and accountable for they way they have overseen and managed CPA Australia. The law is very clear on this.
The problem at CPA Australia is that the board and senior managers (and it would seem the Independent Review Panel is of like mind - and hence my main criticism of it) were happy to take the rewards but are not so keen to take responsibility for the failures (which are legion as the preliminary IRP report certainly confirms, and what has been exposed over the last 9 months).
In other words all the failures at CPA Australia over the last decade are being recognised but the people responsible are not being held to account.
Now that is Corporate Governance CPA Style - and its wrong however you want to describe it.

Let me be more specific, and in so doing possibly provide the reason why the IRP are not recommending firmer action against the relevant persons from the board and the senior management, by just highlighting three matters. The board and senior management is not some amorphous group - it comprises specific individuals who need to be held responsible and to give an account of why they approved these things.
CEO Termination pay of $4.9 million - this was approved and paid by the six directors Dickson, Wade, Petty, Dolin, Portelli and Youngberry. To recoup the $4.9 million means these directors need to be held to account for the decision.
CPAA Advice remuneration to CPA directors and senior management ($1.5 million over 19 months with a revenue of just $47,000, and apparently within budget if the IRP report is any indication) . This was recommended by the CEO 9Alex Malley) and approved by the remiainng CPA board not involved with receiving these moneys - they being Spong, Dickson, Alston, Portelli, Ryan, Ebbeck, Ong and Dowling.
The examples are many but you can catch the drift of the argument I am making.
The directors and senior managers who made the allegedly very poor decisions over the last ten years (read the IRP Preliminary Report to get an idea of what many of these are) should be held accountable for them.
But I'm afarid that the IRP in its 'wisdom' has decided not to action any of them, or perhaps more correctly to recommend any action on them.
Take for example the CEO Termination Payment to Alex Malley - the only recommendation flowing from this is that the CEO's remuneration levels from now on need to be more correctly ascertained. The elephant in the room is well what about the scandalous termination pay? They just say zip.
This is a cameo of the whole IRP's modus operandum (I suggest) - let bygones be bygones, forget the failures of the board and senior management over the last ten years and lets just move on.
I suggest that is not good corporate governance, that is just avoiding the obvious.
As for me I stand by the title I had for the presentation - Corporate Governance CPA Style - A Case Study of Shirking and Looting?

Some may be interested in the chart I did of all the board members by year along with a timeline by year of some major decisions which these people made. It is a quick way to see just who made what decisions rather than this hiding behind this term 'board'.
And I should have added that through all this period the three senior managers were constant - Alex Malley as CEO, and the two COO's - Adam Awty and Jeff Hughes.

I shall add the extra handouts in a following post if they don't all fit onto this one. Hope you can follow the drift of what I have contended from my roughish handout.
Attachments
Timeline of Some Events.pdf
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Presentation 19th October 2017.pdf
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CPA Board Committees.pdf
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CPA Board.pdf
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CPA Australia Board Members.pdf
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Last edited by Brett Stevenson on Fri Oct 20, 2017 3:55 pm, edited 1 time in total.

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Brett Stevenson
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Re: Presentation on Corporate Governance CPA Style 19th Oct 2017

Post by Brett Stevenson » Fri Oct 20, 2017 3:52 pm

Some more of the handouts from the meeting.
These are from past emails etc to highlight points made in the presentation.

It is worth adding that one of the questions asked last night stumped me a bit, and after a day to reflect I still have no 'good' answer.
It was really what sort of future does CPA have if my negative contentions about the IRP Report are true and that no firm action is taken regarding some of the obvious failures detailed in the IRP report?
I want to be able to say it will be a positive future and that CPA will be restored, and I sure do hope that happens. I'm sure that is the desire of most people. But I cannot in all sincerity say that if the mindset or approach does not change.
Maybe the new board will surprise us all and take firm action but the indicators, if the AFR interview with Peter Wilson is any guide. I mean you can just see it now, they have benchmarked the boards and management salaries against the RACV (membership of 1.2 million apparently)? What a doozy. Thats just the same sort of sales talk and 'justifying the wrongs' that makes a mockery of straight talking and openness.
I feel all the hard decisions will be deferred to the IRP recommendations (which to date are very very soft, and given their latest announcement that they are not looking to make any more findings, just relook at the recommendations for their final report, it does not look good).
I think best if others answer that question. If CPA Australia does not make a strong stand now and take firm action against the persons responsible for some of these past fiascoes then it does not lay the foundation for a strong professional organisation. I hope I am wrong and will be the first to 'eat humble pie' if I am, but it does not look good from where I am sitting. Corporate Governance CPA Style is in need of some major reform.
Attachments
Chairmans Memo 16th June 2017.pdf
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Members Growth Numbers Misleading.pdf
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Episodes 1&r Response to CPAA Memo 16th March.pdf
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Email 1 -21st Feb2017. Alex Malley and CPA Australia OUR MEMBERSHIP FEES BEING WASTED!!!! - CPA Members.pdf
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2march 2016In response to your emails.rtf
(15.25 KiB) Downloaded 52 times

Magnet
Posts: 65
Joined: Mon Jun 19, 2017 10:18 am

Re: Presentation on Corporate Governance CPA Style 19th Oct 2017

Post by Magnet » Mon Oct 23, 2017 9:17 am

Thanks for this Brett,

Well done on the presentation!

chuck_meister
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Joined: Fri Mar 31, 2017 8:58 am

Re: Presentation on Corporate Governance CPA Style 19th Oct 2017

Post by chuck_meister » Mon Oct 23, 2017 4:06 pm

There is a thread on the main CPA linkedin group. I've referenced this page so that they can access the documents.

Magnet
Posts: 65
Joined: Mon Jun 19, 2017 10:18 am

Re: Presentation on Corporate Governance CPA Style 19th Oct 2017

Post by Magnet » Thu Nov 02, 2017 5:27 pm

Was a video link going to be made available to watch this presentation?

theallseeingeye
Posts: 99
Joined: Sat Jun 03, 2017 4:23 am

Re: Presentation on Corporate Governance CPA Style 19th Oct 2017

Post by theallseeingeye » Thu Nov 02, 2017 8:43 pm

go to http://www.cpagas.org for the video

Magnet
Posts: 65
Joined: Mon Jun 19, 2017 10:18 am

Re: Presentation on Corporate Governance CPA Style 19th Oct 2017

Post by Magnet » Fri Nov 03, 2017 9:13 am

theallseeingeye wrote:
Thu Nov 02, 2017 8:43 pm
go to http://www.cpagas.org for the video
Thank you!

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