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SPECIAL REPORT: Scrutiny on Peak Bodies

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CPA Australia’s sacking of its Chief Executive, Alex Malley – with a $4.9 million golden handshake – has cast the spotlight on peak bodies representing various industries and community sectors across the nation.

Malley’s downfall, and the story of how he moulded CPA Australia so much into his likeness, continues to play out with potentially damaging consequences for the organisation’s substantial membership.

Can it happen elsewhere? This background report examines the value of peak bodies and the role they play.

The Malley sacking – and its focus on the CEO’s $1.79m a year salary – has over-shadowed and undone much of the work and reputation that CPA Australia has garnered over the course of its 131-year history.

Advocacy or self-promotion?

In just the first six months of this year, the organisation has issued papers, made submissions and commented on 40 different areas of economics, politics, ethics, audit and assurance, the ‘black economy’ … and more.

For example, its detailed submission to the federal government prior to the May budget made the case for major tax reform, arguing that there is an over-reliance on corporate and personal income taxes.

CPA Australia said that many of the 125 taxes levied federally and at the state level are inefficient; for example, stamp duty on property transactions … and it presented a series of scenarios for lifting the Goods and Services Tax (GST) to 15 percent.

As one of the better resourced and more high-powered peak bodies (it reportedly had revenues of $180m last year), Malley says the creation of his image was a key element of a strategy to have the organisation and its 160,000 members regarded as more than accountants – but as business and thought leaders.

The height of his profile, however, was unusual to the point that it was perceived as self-promotion, not CPA promotion. It is difficult to recall a peak body with the same situation.

Ledge director, Noel Smith, is a former committee member of two industry bodies – the Commercial Asset Finance Brokers Association Limited (CAFBA) and the Mortgage and Finance Association of Australia (MFAA).

“Peak organisations are designed to fulfill two highly relevant and valuable roles for members,” he says.

“One is advocacy to the government, media, and other stakeholders and the other is to set professional standards via Codes of Practice, education and professional development. Rarely would you see the CEO’s personal profile over-shadowing that sort of work by the organisation.”

The two planks

The first plank – advocacy – is proudly touted by CAFBA.

As an illustration of its lobbying credentials, the Association details a case involving the current federal Opposition Leader, Bill Shorten, when he was Employment and Workplace Relations Minister in the last Labor government.

CAFBA says it was the only industry body to resist changes embodied in the National Consumer Credit Protection Amendment (Credit Reform Phase 2) Bill.

“In February 2013 CAFBA, after 9 long years of lobbying managed to convince Minister Shorten to remove NCCP Phase 2. This piece of legislation would have significantly impacted on the ability of hundreds of thousands of small businesses to access credit.”

Both planks – advocacy and professional standards – are exemplified by the Mortgage and Finance Association of Australia.

Advocacy and influence are listed as the first of the MFAA’s Objectives, followed by enhanced professional standing for its members, which include virtually all of Australia’s major lenders.

Apart from its Code of Practice, the MFAA also operates Disciplinary Rules which include orders against members which can be made public if deemed appropriate. Professional development activities include conferences, webinars, networking events, excellence awards and a national roadshow focused on building the staff, optimising management and business growth, and adapting to change.

CAFBA and the MFAA are representative of numerous professional peak bodies that advocate and oversight the development of trust essential to enduring business and community success.

“In the main, you rarely hear of the work they do within their sectors,” says Noel Smith.

“And that’s largely because they endeavour to operate to the standards they set for their member companies and individuals. Naturally, some peak bodies will do it better than others, but I dare say not many, if any – not even CPA Australia – will take the Malley path to the future, regardless of the good work that may or may not have been done under his leadership.”

 

 

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