If it stands up for itself, the Review Board will work

If the accountancy profession’s proposed Review Board is to succeed in its aim of ensuring the public interest always prevails, it must possess three important qualities: independence, independence and independence.

Furthermore, this must be a ‘conspicuous independence’ as this week’s consultation paper on the new regulatory regime, which sets out the radical and innovative approach to professional regulation, makes patently and quite rightly clear.

On this key point, there can be no doubting the desire of the Swinson-Gemmell working party that their proposed Review Board is a truly independent organisation sitting in impartial judgement of the profession – constantly acting as ‘a goad’ to ensure the six institutes perform their regulatory and disciplinary duties to the satisfaction of the public interest.

For as they realise, this hermetically sealed apartness is the key to the success of the whole enterprise. If there should be any suspicion that the Review Board is susceptible to pressure from the profession, then nearly two years’ hard talking will be wasted.

To ensure this independence of operation, members of both the Review Board and the Foundation organisation, to which it reports, will have to be of the highest calibre and integrity. Which is why even the small team of a chief executive and some non-execs heading three or four experts, who meet perhaps only quarterly, is being costed at around u500,000 a year. A figure of the stature of Lord Nolan is being talked about to head up the board.

As this money is to come from the six institutes, the cynics will question just how much independence this really provides the Review Board. While maintaining that self-funding will not jeopardise independence, the working party is sensitive to this charge, and is seeking contributions from the Department of Trade and Industry, the Bank of England and the Stock Exchange.

It is not hopeful, however, of anything being dropped in its hat – so is charging the Foundation with the power to arbitrate in any funding disputes between the CCAB bodies and the Review Board.

With a less independent footing than the Swinson-Gemmell party is proposing, the US Public Oversight Board has proved itself a successful ‘goad’ to its profession. There seems every reason to believe that the Review Board can prove itself just as successful over here.

The DTI is unlikely to inject any last-minute spanners in the works – indeed it is understood to admire the manner in which the profession has taken itself by the intellectual scruff of the neck and re-thought regulation.

And the Labour Party will be satisfied with the outcome if agreement is reached across the profession and the business community.

By January 1998 then, a new regulatory regime will be in place. And long before that, two other major pan-professional initiatives will be in place – a reformed Joint Disciplinary Scheme (details in a few weeks) and a new all-encompassing ethical framework (a little later).

Both new codes are being prepared in the knowledge that judgement will be passed on their effectiveness as one of the first acts of the Review Board. This adds a keenness to the thinking of the respective working parties. If the results are credible and effective, it will prove the Review Board mechanism is working before it is officially in existence. A sign, surely, that at last the profession may have a regulatory system it can be proud of.