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
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17/11/17 Brett's Post Final Email. Special Resolutions for AGM

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Brett Stevenson
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17/11/17 Brett's Post Final Email. Special Resolutions for AGM

Post by Brett Stevenson » Tue Nov 14, 2017 9:27 pm

Dear members,

Well I thought my last email was going to be just that however events have transpired which really do require me to make this a post-final email.

I shall try to keep it brief.

A good friend who is a lot sharper than me suggested that perhaps the current and recently past CPA board, and also the Independent Review Panel, are taking me/us for a ride. My initial response was ‘I don't think so’, however I am now more inclined to agree with my friends assessment.

So this email (and proposed action) is partly to try to 'lock in’ some changes in case that occurs, and partly to ensure ALL the voting members of CPA can individually can make a difference at the AGM in April 2018 if ‘being taken for a ride’ becomes de rigueur at CPA Australia.

The independent review panel

I have received no communication from the IRP in relation to the legal letter which I had drafted for the Chairmans attention. Of course the IRP is under no obligation to communicate with me but given that we have spent considerable time, effort and members funds on it, which we quite openly told the members, I expected some response. I leave it for members to interpret that as they wish.
Actually I have had no communication from the IRP since the Preliminary Report was released.

My response is as per below.

To me it is a strong indicator that the preliminary report was pretty much the final report insofar as the findings went and for the final draft they only wanted to make some changes to the recommendations. Their communication with us pretty much confirmed this. I don’t think they were really that serious when asking for feedback on the Preliminary Report, especially if it was critical or questioning of the weaknesses or failings therein.

I, and others, have written in some detail on the weaknesses and failings in the preliminary report. They could be summarised as saying it corroborated a lot of matters exposed over the last 10 months, even if it conveniently missing quite a few, but that it failed to address action against the persons responsible for making those decisions. A negative lesson in corporate governance is another way of expressing that.

You could say the report gives the impression that the CPA leadership at both board and management level was very strong in receiving all the benefits and entitlements that attached thereto (think scandalous remuneration for starters and you will get the picture) but when it comes to taking responsibility for the decisions made (and the report confirms many of them were shockers and have had a major detrimental impact on CPA), it seems that personal accountability is nowhere to be seen.

I call that a negative lesson in both leadership and corporate governance, but then again given what has transpired to expose this, that hardly comes as a surprise. CPA Australia has been a smouldering wick rather than a brightly shining light for some time now. What has surprised me is the way the IRP has seemingly ignored this fundamental premise of corporate governance.

The reality we now face

Before making my recommendation for action it is worth reflecting upon the reality we now face. As discouraging as it may appear, it is the reality so we have to face it.
1. The vast majority of CPA members do not know (as much as we like to think not) and/or are not interested in what happened for the CEO to be sacked and for all the board to have been replaced. Some clearly are but unfortunately many are not. Disinterest and apathy abound.

2. The Independent Review Panel has indicated with its Preliminary Report that it is adopting a very softly softly approach insofar as holding anyone accountable for what happened (no-one will be is there approach). They have been at pains to emphasise the disrespectful approach of the ‘rogue’ members while at the same time commending the silent divisional councillors and the immediate past President Jim Dickson. Therein lies a very important message and signal.

3. The new board have been appointed under a still ‘faulty’ corporate governance structure which most of us have been happy to Iive with in the short term so long as they showed a bit of ticker and made some strong decisions. I guess you could say when the new President Peter Wilsons commendations of the past President Jim Dickson were some of the first utterances to come from CPA then that hope was a forlorn one.

4. Any legal action against past directors or senior management (oppression of members, breaches of directors duties, misleading members etc) can only realistically be taken further by CPA Australia (financially able to do so, but seemingly unwilling to do so) or ASIC (which really is their job but they seem to have gone asleep at the wheel). We members can take legal action but who is going to fund that?

5. When the IRP Final Report is released (late December) that will be the default action plan for the new board (irrespective of whether it is good or bad) who it seems will take the path of least resistance and publicity for CPA.

6. Many good CPA members will not be renewing their membership for 2018. Which is a pity because many of them are exactly the types of members CPA needs to restore its integrity. But I think the CPA leadership will be happy to see them go so they can get along with their ‘leading’ with the least amount of interference from questioning members.

So what can we do?

Well, very little in terms of legal and official channels it would seem. We are almost back to using the same approach we have used all along to expose what has been going on at CPA Australia.
All we can do is expose it, state it plainly, do what little we can and trust that somewhere in the process sanity and common sense will prevail.
But it would seem that the realistic time frame for that is 31st December, being the deadline for the Final IRP Report.

Well this is my recommendation.

That we submit Members Special Resolutions to be voted on at the next members meeting (presumably the AGM in April 2018) . Each resolution will require 100 signatures of voting members.
Also each resolution, along with the explanatory memorandum (which can be up to 1,000 words), are then required to be sent to every member by CPA Australia prior to the AGM.
This will then enable ALL members to receive an explanation for each resolution which I believe will encapsulate some of the more obvious failings at CPA over the past decade.
You can have quick look at relevant sections of the Corporations Act (s.249N especially).

So no matter what the final IRP report does or doesn't say, and no matter what the new board decides to do or not do, we can at least force these specific matters to be brought to the membership’s attention, and for their voting, at the next members meeting.

I am currently organising the drafting of the resolutions and writing the accompanying explanatory memoranda, and shall send them to you asap so that we can obtain the 100 signatures needed lodge them with the board. Some of these matters may be covered by the IRP, and by the new board, however we need to act now to make sure they are ADEQUATELY and DEFINITELY dealt with. Some I suggest they will not deal with.

Members Special Resolutions

These are the topics for each of the resolutions decided to date for your consideration. However if any member has some other resolution suggestions please let me know asap as we hope to have these sent out by the end of November to obtain the required 100 signatures.

1. Reduce directors remuneration by 50% from what it is now. I suspect the new board will try to make this something like a 10% or 20% reduction (with lots of benchmarking to support their position). I suggest we be firm and use the benchmark of common sense, and let’s lock the board into being firm not dithering on this.

2. Set directors terms at maximum of 6 years absolute. Hopefully the IRP will recommend this but let’s make sure they do. No more gerrymandering and stretching directors terms up to 12 years.

3. Members to vote directly for directors no matter what sort of governance structure they establish. The IRP still do not get this and I suggest that is because of the influence of the previously silent divisional Presidents who all of a sudden have found voice. I say we members need to make our voices heard on this.

4. Full disclosure of executive remuneration (board and senior management) as per publicly listed companies. For obvious reasons.

5. Legal action to recoup Alex Malleys $4.9 million termination payment. Again for obvious reasons.

6. Legal action to recoup the ‘over the constitutional limits’ board remuneration through CPA Australia Advice. I just do not believe the almost dismissive justification for this by both the IRP and the old board. If this is legitimate we might as well call it ‘Enron reborn and thriving in CPA Australia.’ Want to avoid the constitution, just create a fully owned subsidiary - that’s the Enron, and presumably CPA Australia way.

7. Tighten up the conflict of interest code of conduct at CPA Australia to ensure sponsorships such as the NBL and South Sydney Rugby League undergo greater scrutiny. They may have ticked all the ‘legal’ boxes of the conflicted directors not being in the room but really these sponsorships should never have gotten off the ground, and the rest of the directors who approved them should be asking can something be legal and not right? If we have to tell tham that is rhetorical question then what hope do we have.

8. Change the constitution to ensure life members pay annual membership fees. You can deduce for yourselves the rationale for this resolution. It was going to be just to stop the life memberships of certain persons but that would have possibly been bordering on defamatory.

What can you do?

If any members have other suggestions for relevant resolutions please let me know asap.

If any member knows of a speedy and efficient way to obtain signatures on the resolutions that would be greatly appreciated. I would surmise there is an app available so if any member can assist with this when the resolutions and explanatory memo’s are sent out at the end of the month that would be appreciated.

I am writing explanatory memorandums for each resolution (a maximum of 1,000 words, reasonably objective and understandable, and cannot be defamatory) so if any member would like to do one or a few or send in some drafts that would also be appreciated.

Why is this necessary?

Because we don’t want to be ‘’taken for a ride after all the hard work to expose what has occurred and to make sure positive changes are made to restore the CPA designation and our organisation. Once the Final Report from the IRP is released you can pretty much say goodbye to any further action from the members.

Let’s aim a little higher than our past leadership has done

I’ve been reminded recently from an article I read on the Ethics of Accountancy of Ralph Waldo Emerson’s saying ‘Hitch your wagon to a star”.
It’s a good saying, and very relevant for CPA Australia and we accountants today.
Ideals and high standards are something we should aspire to, not to drag through the mud. This whole CPA fiasco has brought to the fore the word integrity, and unfortunately for all the wrong reasons.
It is time to restore the full meaning of that word into our professional vocabulary and our actions.

Fighting Fund

I anticipate the bulk of what remains in the fund shall be expended on legal fees drafting these special resolutions. There may be a little left over which I shall donate to the Royal Flying Doctor Service.
I will also provide a full report (audited) for distribution to the members once this is finalised.

CPA Membership Renewal

I have decided to renew my membership of CPA. Not necessarily because I think there will be dramatic improvements (but always optimistic) with the Independent Review Panel Final Report (which I fear will be very soft but I hope I am pleasantly surprised, and only too happy to wear a bit of egg on my face if that is the case) and the new board (who knows, not a very auspicious start but time will tell).
Basically I am renewing because you can have more impact and influence from inside the tent than outside it. And blow it all I would like to see these special resolutions at least get a hearing at the AGM. I need to be a voting member at the time to do that.

Well, hopefully this email finds you all in good spirits (even if possibly a bit too overworked and stressed at the moment) as the calendar year draws to a close.



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Re: 17/11/17 Brett's Post Final Email. Special Resolutions for AGM

Post by Magnet » Wed Nov 15, 2017 12:33 pm

Thanks Brett. Fantastic email...i feel energised reading your posts...great fighting spirit!

100% agree that getting these members resolutions signed and into CPA board is our best course of action. Unfortunately it seems that the quest for 6,000 member signatures need for an EGM has fallen short, but this is the next best thing! Lets vote on the items we want changed!

I would love to see a resolution sent in to strip specifically Malley and Wade of their life memberships even if it borders on defamatory. I want them to know that we dont want them to be a part of our organisation any more!

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Brett Stevenson
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Re: 17/11/17 Brett's Post Final Email. Special Resolutions for AGM

Post by Brett Stevenson » Wed Nov 15, 2017 1:35 pm

I empathise with your thoughts Magnet on life membership but I do think to list specific individuals in a Special Resolution might be moving over the border.
I think the other special resolutions will provide enough publicity and discussion to focus the attention of members and the community at large where it should be. I often think the best thing we can do is provide the attached spreadsheet to people which lists the directors of CPA Australia year by year (from the annual reports), with some of the highlighted decisions year by year (also from the annual reports).

It serves two important purposes (perhaps more) that I can think of
1. It specifically identifies who the individuals were who made these decisions. All too often we remove the sense of individual responsibility from corporate governance by using the term 'the board'. If The immediate past Chairman Jim Dickson can proudly list all these directors as being keen supporters of the CEO Alex Malley during his time at CPA, well I think we are entitled to list them also along with some of the decisions they made. I shall leave it to others to make of that what they will.

2. I think it is worth considering some of these decisions not just in light of the Independent Review Panels Preliminary Report (which was pretty castigating I suggest - remuneration and strategic focus on one person (Alex Malley) being just two that come to mind) but also in terms of the legal attitude to directors duties - what would a reasonable person in these positions do? Again I leave it up to members to think about that one a bit. Perhaps you might like to think about CPA AustraliaAdvice which per the IRP was performing better than the business plan on the expense side. Can you believe that - $7.2 million loss in 19 months with a revenue of just $49K, and the key management personnel (all of who were also CPA KMP apart from one) managed to be paid $1.5 million for overseeing it. But the IRP said it had a strategic rationale so it is seemingly okay. Well I suggest the rationale needs to be that of a reasonable person in their positions. There is a big big difference.
Try that with most of the decisions.
CPA Board.pdf
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Governance Analysis.xlsx
(34.89 KiB) Downloaded 85 times

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Re: 17/11/17 Brett's Post Final Email. Special Resolutions for AGM

Post by aceone » Fri Nov 17, 2017 12:01 pm

Hi all
Just wondering out aloud if a question for the AGM is "how many members have sought and received a letter of good standing for their membership to be moved over to CA ANZ"? A supplementary question might be "how many public practitioners didn't renew their membership for 2018"?

I hope the IRP are reading posts in this website and taking note of the queries and comments with a view to providing the information in the final IRP report.
Tracey Jones (right now, I'm too embarrassed to admit that I'm a fully paid up member), CA
CTC Taxation & Accounting Services Pty Ltd
Sorell Tas 7172

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Re: 17/11/17 Brett's Post Final Email. Special Resolutions for AGM

Post by nakedadmin » Fri Nov 17, 2017 2:11 pm

I've got mine. But you know everyone who does not renew is still included in the 31 Dec member numbers.
The Naked Webmaster

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Re: 17/11/17 Brett's Post Final Email. Special Resolutions for AGM

Post by Stomper » Fri Nov 17, 2017 3:52 pm

aceone wrote:
Fri Nov 17, 2017 12:01 pm
Hi all
Just wondering out aloud if a question for the AGM is "how many members have sought and received a letter of good standing for their membership to be moved over to CA ANZ"?
I've got mine too

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Re: 17/11/17 Brett's Post Final Email. Special Resolutions for AGM

Post by certified sane » Thu Feb 01, 2018 1:29 pm

Found this little beauty which gave me a chuckle. Thanks and kudos for those few who stood up and refused to go away.

apathy.jpg (90.36 KiB) Viewed 2141 times

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