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Some great questions for the AGM from members

Questions members would like to have answered at the AGM in Singapore
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Brett Stevenson
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Some great questions for the AGM from members

Post by Brett Stevenson » Fri Apr 21, 2017 12:39 am

5. Some great questions for the AGM from some members.

CPAA will censor out the good ones, so we might as well know what some of them were.
Questions on CPA Australia 2016 Annual Report


1. Membership fees: CPA reports a significant operating surplus, and continues to increase fees on an annual basis. What is the basis for the increase in member fees?

2. CPA Australia report comprehensive income for the financial year of $9,532. Note 15 to the accounts shows Parent Entity comprehensive income for the year of $14,873. What is the reason for the discrepancy? (By way of comparison, in the 2015 financial year the parent entity showed total comprehensive income of $7,701 versus a reported consolidate comprehensive income of $7022)

3. Note 18 to the accounts shows an interest free loan to CPA Advice of $5,594,000. Why do the directors and auditors feel this amount is recoverable?

4. What are the operating costs of CPA Advice? How are these costs being accounted for?

5. Revenue has increased 3.4% on an annual basis, administration expenses have increased 5.8%. What is driving the increase in administration costs and why have they increased at almost twice the rate of revenue?

6. Revenue has changed from $140,810 in 2010 to $180,115 in 2016, an increase of 27.9%, while at the same time administration costs have risen from $27,541 to $52,142 and increase of 89.3%. Why the disparity in the level of increase when it seems staff numbers have reduced in this period?

7. Table 5 on page 20 of the Annual Report shows Australian operations incurring a loss of $18,280. Clearly all administration costs are being borne in the Australian operations. What is the positon of Australian operations as revealed by management accounts? What are the real surplus/loss position of operations in each area of geographic representation?

8. Table 4 on page 20 shows revenue from membership fees have increased 4.9% on an annual basis. How much of this increase has been generated by increase in Australian based member fees?

9. The business model as described on pages 4 and 5 of the annual report has added activities under inputs, value adding activities, outputs, outcomes and value created for financial advice. How are these activities measured? What are the value measures that define success for these activities?

10. KPI measures as disclosed on pages 18 and 19 of the annual report: How does answering calls within 20 seconds equate to driving world best member engagement and service? Why are the level of CPA exam sits falling? Member satisfaction survey results are falling; what tactics are being implemented to address this fall from 6.3 to 6?

11. How are marketing returns on investment measured? What constitutes a social media engagement and how is this measured objectively?

Cheers
Brett

Brett Stevenson CPA BComm MDiv
bstevenson100@gmail.com

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Re: Some great questions for the AGM from members

Post by nakedadmin » Sun Apr 23, 2017 9:10 pm

I will not be sending in a question, but someone should ask:

Over 20% of the membership is in Asia including over 10% in China. Some advertising such as the Australian Open specifically targets China (ref Important member information document by CPA Australia). What is the target for membership in China? Surely considering the percentages of membership and money spent on advertising there is a goal, what is it? What's the time frame? What is this for other countries as well?

There would be many cases where an overseas organisation has some connection with Australia and therefore is looking for a CPA. However, using the Australian Open to market to the youth in China goes way beyond this. What is the purpose and benefit to Australian CPAs?

You'd think with this being the first AGM overseas and the big pat on the back they are giving themselves about it they would have a clear idea about why, how, when and where.
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Re: Some great questions for the AGM from members

Post by Brett Stevenson » Sun Apr 23, 2017 9:24 pm

1. I notice from Adam Awty's letter to us of 14th April 2017, regarding the fee we had to pay to obtain the Members Register, that the number of members at that date was 155,116. Whereas the number of members given in the 2016 Annual Report, presumably at 31st December 2016, was 'more than 160,000'. Was that just a rhetorical flourish or have we lost 5,000 members in the three and a half months since 31/12/16? If so, can you please explain why?

2. Why do we pay exorbitantly high levels of remuneration to three senior executives when we are a membership organisation with very low commercial risks and a very steady, almost guaranteed income stream each year? What comparative organisations or companies have you used to justify these exorbitant salaries as they exceed 'by a country mile' all comparable organisations and public companies we have examined?

3. How can you say we adopt the 'best of the best' corporate governance model when the members never directly vote for the directors nor can they remove them?

4. Why do you refuse to provide full disclosure on some of the obvious contentious issues such as the exorbitant remuneration to Key Management Personnel, and the marketing expenditure in specific areas such as billboards, tv program of Alex Malley, tennis sponsorship, book? Why wouldn't you, we are a member organisation without the competition risks of the commercial world in terms of disclosure so why the refusal as full disclosure would answer most of the criticisms and questions?

5. How can you say the members elect the Representative Council when almost 50% of the councillors are not voted on by all the members of the various groups but are rather selectively chosen with the board being the ultimate arbiter?

6. Can you clarify why we have locked into the constitution a maximum remuneration % for the President based on him/her doing 3 to 4 days work per week at CPA Australia when we receive contradictory messages from you about his/her actual workload, and then the blanket refusal to tell us what the President was paid last year so we can clarify the issue? The current President has told his current employer (Sydney University) that he will not be required for any more than 1 day per week. Can you please clarify this anomaly and provide proof by disclosing what the President was paid last year rather than verbal assurances.

7. Why do you maintain a minimum but compliant reporting disclosure approach when we are supposed to be the standard setters and the organisation that protects and maintains the best accounting standards? It appears that we talk a higher standard than we actually walk.

8. Why have you said that the Find A CPA function on the website was out of action because of a technical problem, then later have said it is a deliberate management decision for fear of users compiling a mailing list from it? Do you think that is being realistic?

9. Have the board sanctioned and rebuked the CEO Alex Malley and director Graeme Wade for inviting themselves unannounced to one of the largest CPA Discussion groups in Sydney and then threatened and berated members should they be involved in distributing or discussing issues of importance to the members? Do you regard the CPA leadership as the arbiter of all discussions of issues for members? What sort of culture are you endeavouring to develop at CPA Australia?

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Re: Some great questions for the AGM from members

Post by Brett Stevenson » Mon Apr 24, 2017 12:34 pm

1. Why did the directors of CPA Australia allow the sponsorship gift of $736,000 to the NBL to go through when it was an obvious and blatant conflict of interest with the immediate past president and current director Graeme Wade being also the Chairman of the NBL?
And these are the specific directors we would like to answer that question - Richard Alston (surely as an ex Federal politician he should have known better), James Dickson, Deborah Ong, Michele Dolin (surely her experiences with such issues in WA with the gov't superannuation would have made her sensitive to this), Jennifer Lang, Martin Hourigan, Sharon Portelli, David Spong, and of course the long serving Graeme Wade (well, I'm sure he stepped out of the room when the decision was made?), Kerry Ryan, Richard Petty and Tyrone Carlin.

2. With all the issues facing our profession, and the challenges we face as members, why do the board seemingly waste our money on sponsorships such as Tennis Australia, NBL, and the endless self promotion of Alex Malley when the needs of the profession and the members are ignored and often denigrated because of the above? And please do not sat they aren't because we know that is not true - your refusal to fully disclose the expenditure on these items demonstrates that to us.

3. Why do you market Alex Malleys book with expensive billboards internationally (NY, London, Tokyo) when we are CPA Australia, and why is the CPA logo not even on the advertising?

4. Why have you marketed the face of Alex Malley so heavily instead of CPA Australia?

5. Are you investigating the allegations that Alex Malley withheld unfavourable matters about his past at Macquarie University (allegedly 'sacked') along with his possible conflict of interest connections with current directors Carlin and Petty at the time, and whether a proper due diligence was done when he became President and then CEO of CPA Australia?

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Re: Some great questions for the AGM from members

Post by nakedadmin » Mon Apr 24, 2017 3:48 pm

In relation to Find A CPA and the other pages removed:
* Who took the decision to take it offline and tell members it was a technical problem?
* Does the board consider it is ok to lie to members? If not what is being done about it?
* Who took the decision to take the pages about the representative council and divisional councils offline and why?
* Noting that the board is aware of this since at least the 16th March 2017. Why are these pages all still offline and can we please have all these pages restored?
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Re: Some great questions for the AGM from members

Post by deaneus » Thu Apr 27, 2017 1:14 pm

The AGM is tonight at 7pm Adelaide time / 7.30pm Sydney Melbourne Brisbane time and 5.30pm Perth time (i'm pretty sure)

Is it being streamed anywhere??

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Re: Some great questions for the AGM from members

Post by deaneus » Thu Apr 27, 2017 1:42 pm

Ah it turns otu that:

Watch our AGM live on Thursday 27 April

CPA Australia is proud to be holding its Annual General Meeting (AGM) this week in Singapore, the home of our first registered office outside Australia. For the first time all members will be able to access the AGM, wherever they are in the world. Access is easy, simply visit the CPA Australia homepage and click on AGM live stream. No registration is necessary. The live stream will be available on Thursday 27 April from 7.30pm AEST / 5.30pm SGT.

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Re: Some great questions for the AGM from members

Post by nakedadmin » Thu Apr 27, 2017 10:49 pm

A bit of summary for those who were lucky enough to miss it.

Some opening remarks from Tyrone which he later mentioned was answering all the questions that had been sent in in advance. Which stated:
* Lots of members in Asia
* Surpluses are a remarkable achievement
* Whilst disclosures of salaries are super transparent they have heard the requests for more and therefore the board will consider what it does about that for next year. Seems to me like the process is listen to feedback -> consider -> do nothing.

James Dickson - Deputy President said somethings which was boring except for the phrase "accountable to members on all aspects of performance". I'm still waiting for that. There was no explanation of how or what mechanism.

Questions from floor:

* How will they position the brand in Asia? Tyrone answered with some explanation of how they market to young people. Seems like he missed the point. I thought the questioner wanted to know some things more like how they would differentiate the brand from other accounting associations like the ones they have in Singapore and China or other countries.

* CPA has given a strong signal by holding the AGM in Singapore. What is strategy to grow in Asia and how long will it take for international members to outnumber Australian members. I was quite impressed as that was one of my questions. Non answer though. Tyrone answered by saying they are committed to investment, hard work and presence and high quality member services and composition of the board may change to reflect overseas focus. He seems to have misunderstood the question. You'd think that an organisation with such a big focus on growth in Asia would have a clear target and time frame. It seems like they have not considered what kind of organisation it will be when international members outnumber Australian members or when that will happen.

* Annual report says over 160,000 members but other correspondence says about 155,000 why the difference? Tyrone again the difference is because of member strike offs. Some members don't pay their dues and get struck off but when they later pay they get reinstated. So now here's the thing. Did they just avoid sending us the details of 5,000 potentially disgruntled members the majority of which it is implied will pay up and be reinstated. Also they claim that their membership retention is about 98.5% but 3% in the process of being struck off. Now that's just amazing. So when they want them to be members for the purpose of measuring retention they are members but when they don't want them to be members they are off the list. Hmmm.

* Some question about employers. Tyrone answered something about some preferred employer program.

* Some legend got up and asked about salaries. Brett should buy that guy a beer. Even mentioned the current section 202B request. Tyrone said he would comply with legal requirement to release information related to 202B. Also stated that they would obviously release comparative information if they increase the salary disclosures. No reply form Tyrone to the assertion that the Director salaries are too high. Tyrone said the board considered carefully the level of disclosures and considered what comparable organisations are disclosing. Seems to me like this term "comparable organisation" means CA or IPA when talking about disclosures but then means Rio Tinto when talking about salary levels.

* Some question about relation with stakeholders. Tyrone only talked about universities. Strangely he mentioned that CPA Australia is funding research. Interesting. Any conflicts of interest?

* Question from Terry Brooks who would have got good brownie points. He is on the Vic div council and seems to travel the world visiting CPA offices. Can't remember how many he said he visited. It was a lot so I hope that CPA Australia is not paying for it. He stated that the President had indicated a governance review. Which was an interesting comment because I didn't hear the President say that. Anyone know anything on that? Finally the question was will there be more AGMs overseas. Tyrone said considering the positive feedback the board will take it into account. They keep saying they listen to feedback but no evidence yet.

* What is CPA Australia doing to help accountants in the new world of IT? Good question and you'd think they would have a better answer. Tyrone said this is a consideration very much in their minds. So they are reframing what it means to be a CPA. Things that will be likely to survive will be leadership and judgement. Gee for a second I though that the consideration was very much in their mind and they would show some leadership, nup. Expect more MS Excel courses everyone!

* Question about investment of funds. What is the strategy? Tyrone referred this to Nicholas Diss who said it was a balanced strategy and capital protection strategy. Hang on aren't they 2 different strategies? CPA Australia has a lot of money to invest, #NFP!

Everyone was a sleep by then so Alex made a point to state how much feedback they get and how much they listen. He said members want a global brand, knowledge access and advocacy. He said they don't always get it right but when they are wrong the fix it. I suppose he is referring to how he fixed the Find A CPA and other pages on the website and fixed the social media platforms. Anyway he wrapped it up by thanking the board for the courage to go first and thanking his COOs and staff. I'm not sure what this board did first if anyone knows post a reply.

Tyrone closed the formal part of the meeting and invited everyone to refreshments.

A lot of talk about being the best member services organisation and listening to feedback.
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Re: Some great questions for the AGM from members

Post by Tigers333 » Fri Apr 28, 2017 12:40 am

I congratulate Brett on having the guts and making the time to stand up to these guys. My discussion group raised many concerns a year or so ago and had the dubious pleasure or Mr Wade & Mr Hughes come out to allay out concerns. Frankly, the group got pretty fired up and what we all concluded was
1) Either these guys are idiots taking in my the Malley smoke and mirrors machine or they were part of the gravy train so they were pushing the smoke and mirrors on us
2) They were genius impersonators of Sir Humphrey Appleby of yes minister fame...talked alot, said nothing and skillfully replaced answering questions with their nonsense speeches
3) they thought we were idots who could be conned into believing their nonsense

The problem we all face is nothing short of a nuclear explosion will eradicate these people...they are on salaries they could never get within cooee of in the real world...they are all part of the rorting gravy train, be it books, billboards, basketball sponsorships or handing each other collective large payrises....it is amusing to hear how these salaries are benchmarked...Alex Malley was a first year lecturer at the number 3 uni in sydney (macquarie) and left under a serious cloud of alleged misconduct to head up an organsation (put there without proper due diligence due to mates rates) where in effect members for professional reasons have to be captive...frankly my dog could run it !

The other problem we face is they have serious $$$ in the banks to take on any member who rocks the boat...they can and will attack with their high priced lawyers and destroy anyone in their way.

We all need to stand behind anyone under such a threat to show we are not the weak accountants they think we are

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Re: Some great questions for the AGM from members

Post by chuck_meister » Fri Apr 28, 2017 9:16 am

Congratulations Brett for successfully obtaining the membership list. I did note that Alex and the Board continue with their disdain for proper transparency by providing the absolute minimum and excluded email addresses. This is clearly also a thinly disguised attempt to impose additional communications costs and hinder correspondence between members. Hopefully, most will have LinkedIn accounts, so although it is a burden it is still possible to communicate/network through that. Now we await the outcome of the 202B.

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Re: Some great questions for the AGM from members

Post by JJF » Fri Apr 28, 2017 10:45 am

I can't believe they would exclude the email addresses of members!!

How pathetic is that!

Did Awty give a reason why email addresses were excluded?

Given that I expect the majority of members have ticked on their membership accounts that the preferred contact method is by email, then the list at the minimum should contain email addresses for those members.

Brett, you should go back to Awty and ask for an updated list with email addresses of those members who have listed email as their primary contact method with CPA.

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Re: Some great questions for the AGM from members

Post by nakedadmin » Fri Apr 28, 2017 10:52 am

I agree, every year we renew and enter our email address and select a preferred contact method.
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Re: Some great questions for the AGM from members

Post by Andrew Gatty » Fri Apr 28, 2017 11:44 am

I thought I would give a brief synopsis from the meeting last night from inside the palatial Conrad Singapore ballroom.

As far as I could tell of the 300 odd attendees there were only two of us aware of the issues currently in the media/ on this forum.
I am a Chartered Accountant who happens to work across the road in Singapore (however I believe this is an issue that has grown to affect the industry as a whole) and the other paid their way from Australia for the privilege of asking a question.

I did have a printed copy of all your questions and would have liked to work through them but unfortunately given the large audience who were unaware of the issues it wasn't the correct forum. I did however feel it necessary to get more on the record from the Chairman regarding the remuneration disclosures which clearly are not adequate.

45 mins after the meeting, began it ended (a meeting I estimate cost around $150k...) I took my dues and skipped the buffet as I was being stared down one person who shall remain nameless.

Brett keep up the hard work! we all owe you a beer and the rest.

Unfortunately I struggle to see a way forward currently. Perhaps at some point you'd have to question paying your membership dues and joining another organisation.

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Re: Some great questions for the AGM from members

Post by Brett Stevenson » Fri Apr 28, 2017 12:04 pm

A big thanks to you Andrew.
Yours and Wendy Sheltons question were the ones which touched on the real issues.

47 minutes for an AGM, and none of the questions submitted to CPA from members in Australia were read out or answered. Fancy that after all their saying moving the AGM to Singapore will be okay as members can lodge questions beforehand to be asked, and not one was asked not answered.

Tyrone Carlin needs to rethink what it means to be President/Chairman, and that the AGM is the only forum for members to ask questions of the Board and management. And this is what he dishes up to us.

The s.202B which you referred to Andrew will be lodged on Monday and that will force them to disclose the directors individual remuneration in 2016. We tried to forewarn them, as did you also with your question, so they could do fully disclose at the AGM, to at least give themselves some sort of opportunity to get on the front foot on this issue. But alas they keep digging the hole deeper.
I wondered what Jim Dickson thinks about this. This seems sheer folly to me.

But good on you Andrew for making the effort, taking the time and asking the questions at the AGM. I thought most of the others apart from Wendys were like friendly Dorothy Dixers. The one from Mr Brooks, as a Divisional Councillor was a shocker (fancy saying the remuneration and corporate governance at CPA were okay).

And Wendy I think a 5,000 loss of members since Dec 2016, and the reduction in numbers sitting for CPA exams, was telling in itself. The evasive answer was also very telling.

So, good on you Andrew (and Wendy). Much appreciated by us all.

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Re: Some great questions for the AGM from members

Post by vaughn » Tue May 16, 2017 4:50 pm

Well done Brett for speaking up against this egotistical bunch; Alex Malley thinks he's Kochie.

I'm one of the 5,000 members who had my membership forfeited. They tell me it was my decision but if I'm provided with the option to pay $50 late payment fee then I don't expect to be kicked out 3 months later. And after 28 years as a member.

Well, I won't be chasing them to have my membership reinstated. Not until the organisation loses its arrogance and misguided personal agenda.

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Re: Some great questions for the AGM from members

Post by Better Call Saul » Sun May 21, 2017 7:12 pm

Vaughn, you were shafted.

Now you are no longer a member you might consider bringing a complaint against some of these perps on the Board. If any one of the Board has his/her membership suspended they automatically lose their Board position.

Or you could just go for one of the executives.

Either way what have you got to lose?

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