Democratic reform is taking place all around us: referendums, devolved government in Scotland and Wales with directly elected assemblies, elected mayors for London and perhaps major cities. Even party leaders are (or will be) directly elected by the members. In contrast, the accountancy profession looks decidedly ‘un-cool’!
Trade union members elect their leaders. The Law Society president is elected by the members. But the presidents of the UK accountancy bodies are not directly elected by the membership. Some 25% of the English ICA council is not even elected by its own members. At ACCA, through the delegated-proxy voting system, a president – not directly elected by the membership – casts some 25% of all votes. The council continues to be ‘appointed’ rather than elected.
The most powerful and influential person in any accountancy body is its chief executive. But this person is not elected by anyone. His or her salary, perks and contract are not approved by the members. The office-holders of the bodies could spend thousands of pounds every year taking their friends on overseas trips.
Ordinary members may receive no direct benefit, but the costs can be charged to the professional bodies. Ministers of the Crown have to make such disclosures.
Disclosure would be required of a company to its shareholders by FRS8.
Is such disclosure made to the members of the professional bodies?
Most UK accountancy bodies have made some moves towards opening up their council meetings. ACCA remains the only major body which neither admits its members nor the public to council meetings. Unlike other bodies, the ACCA List of Members does not show the composition of members by age, gender, occupation or geographical areas. This does not easily enable members to consider the consequences of council policy.
Greater democracy and openness are inevitable in accountancy. The Monetary Policy Committee of the Bank of England publishes its minutes and voting records. We can all see, and judge for ourselves, how interest rates are set. The accountancy profession should insist on reform and modernisation.
Its influence and reputation will be the stronger for it.
Jim Cousins is Labour MP for Newcastle Central