Sixty-five days. That’s how long it took for all twelve board directors of CPA Australia to announce their resignations, along with their termination of CEO Alex Malley’s employ. A corporate governance meltdown of this scale is virtually unheard of in Australia, but there it was for all to see.
After months of defiant self-defence, the announcement two Fridays ago that all of CPAA’s remaining board directors were on their way out came via the Board’s communication vehicle of choice: an all-member email. Kind of ironic really, given only two days earlier CPAA’s continued denial of member-to-member electronic communications had been the subject of a Senate Economics Committee hearing. Good for the goose, but not for the gander?
The Senate representatives were considering whether the Corporations Act should be amended via the Modernisation Bill proposed by Senator Xenaphon to bring member registers into the 21st century by including known email addresses for shareholder communications. Seems like a pretty good idea to me…
But anyway, back to the Board of CPA Australia. The fact they announced their impending exit is surely the first sensible decision they’ve made in a while. Over the past recent months I’ve been working towards this outcome and I’ve received literally thousands of messages of support from fellow CPA’s who are adamant it was the only way forward.
“So am I happy now?” asked a journalist. The exit of the board, after all, is what I’ve been fighting for.
To relate my response to that question, it’s important to understand why I believed in the change. Why, in my mind, a full spill of the Board was the only option.
By way of context, it so happens I was an employee of Arthur Andersen when the Enron case study unfolded. I saw the impact that the decisions of self-serving “leaders” at Enron had on their employees and shareholders, of people left destitute through their deception. I felt the impact of self-serving partners within my firm trying to protect their own butt, directing teams working overtime on the shredders, and their unethical behaviour ultimately destroyed the firm that I loved. And I could see so many similar behaviours on display in our Board and leaders at CPAA: they simply thought they were above the members they were employed to serve.
This board with all its self-interest, greed and ignorance needed to go. All of them. Their legacy includes alleged abuse of powers such as breaches of the Corporations Act and the company constitution, failed investments and promotion of a celebrity CEO above member interests, and nest feathering that – in toto – have absorbed tens of millions of dollars of member funds in the past year alone.
And, honestly, I was embarrassed by the picture of greed and largess and ego being painted by Malley and his Board. I wanted all of my friends and family and colleagues and business associates to know that rank and file CPAs aren’t tarred with that same brush.
But am I happy with the outcome? Of course not. This has been an embarrassing chapter for our professional association and to be honest there’s many a time I’ve wanted to crawl under a rock and pretend I’d never been a CPA. But very early in the piece it became evident that wasn’t an option because:
- that’s exactly what Malley wanted us all to do. Many members were told over many occasions that if we didn’t like the strategy, well we could just leave our professional accreditation behind, which of course is actually a non-option; and
- that wouldn’t have achieved much for our membership, especially for younger members who can’t easily avail of the special admission provisions offered by CAANZ; and
- my professional background is change, so I knew I could and should do something about what I observed.
From a governance perspective, there is still a lot to be achieved, though removing every one of the Board members that allowed this to happen is a good starting point. What I want to see now is a transparent process for appointing new board members who – for all intents and purposes – will be an interim caretaker board charged with implementing the findings of the Independent Review under way.
The review recommendations should include shutting down the failed CPA Advice business that resulted in our loss of Professional Standards Scheme accreditation; a full end-to-end review and re-set of the organisation – all roles, responsibilities, and remuneration; and, of course, governance changes that will restore more control to members into the future since the failed Representative Council model clearly hasn’t worked.
To that point, a lot is being said about changing the governance structure and constitution, but it’s worth remembering that’s not what caused the mess CPA members now find themselves in. Let’s be clear: it was a small group of individuals who caused this governance meltdown.
This group ran rough-shod over members for many years, gerrymandering outcomes that were self-serving at the expense of what members wanted and needed from their professional association. That is simply wrong.
Since we can’t change what happened in the past, I’m choosing now to focus on the lessons for the future, such as:
- How the governance structure and leadership behaviours enabled this to happen;
- What integrity really looks like in action, from the perspective of those who chose to speak up from the outset when there was incredible pressure not to;
- The challenge of apathy in the masses, how that came to be and how those of us on the Spill Team overcame that apathy to build an engaged and committed group of followers;
- The value drivers and motivators behind the agitators for change, who were all on the bus for slightly different reasons, but were able to work toward a common goal of restoring CPAA to an organisation whose governance is beyond reproach; and
- What professional collaboration really looks like, where there are no egos and it is simply about living up to our professional and personal values.
With the goal of spilling the Board effectively achieved, the role of the Spill Team will now naturally shift. Exactly what shape that member advocacy will take now and into the future is still being determined, but I look forward to sharing news of that as it unfolds.
Yours, in anticipation of the next chapter,