PracticePeople In PracticeLetters – 13 May

Letters - 13 May

Just because we’re dead…

I am grateful to Ann Baldwin for drawing attention to the advertisement which blatantly discriminated against dead accountants (8 April).

On a practical level, I am surprised more employers have not realised their value. As there is no provision under the minimum wage legislation for phantom workers and they are not covered by employment protection legislation, the astute employer should realise that not only can one get away with paying them nothing, they can also be sacked at the drop of a hat, thus giving maximum flexibility and control of costs.

As an HR consultant, I am outraged by this advert. It represents yet another example of discrimination creeping into employment practices.

Now sex and racial discrimination have been outlawed, where is the protection for our silent friends? Will deadism become the next cause celebre?

Alan Sheldon, Imago Consulting

Ignorant or unscrupulous I read the article ‘Keeping better company’ by Andrew Tonge (22 April) with great interest, since it centred on a problem that is taking up more and more time in the lives of businessmen, lawyers, accountants, and now legislators.

Mr Tonge makes a strong case for the radical reform of the Companies Act, together with the introduction of a directors’ competence test, ‘since self-regulation of small to medium-sized private companies has manifestly failed to work’.

I think he has overlooked some fundamental changes that are gathering speed in the management world, which could make a lot of the potential framework of restraints unnecessary.

Mr Tonge makes the valid point at the outset that company directors unfit to act come in two categories: the ignorant and the unscrupulous. He seeks to find a preventative mechanism which would eliminate the former and penalise the latter.

The body of his argument, however, is directed at the inadequacy of existing legislation to eradicate the professional fouler – which I believe to be the lesser problem, albeit the most persistent.

The growing desire for education at board level is being stimulated, not so much by the awareness of a legal risk, but by the need for better performance in a rapidly changing environment.

The competence of directors is being exposed as the need to share strategic information with other management increases and the educational standard of that management rises. This also applies externally, as business relationships with suppliers and customers assume a strategic significance.

Many SME directors lack a width of business environment experience, but possess a strong entrepreneurial flair. These people recognise that personal education in strategic and operational matters is necessary to lead the evolution of their businesses, and they are seeking a route to it in increasing numbers.

My colleagues and I at the Leeds Business School, who work closely with the Institute of Directors, are experiencing an escalating demand for courses in director education.

Up to now, the stimulus has tended to be personal, along the lines outlined; but the recently unveiled plan for the introduction of the chartered director status later this summer will provide a public dimension that self-regulation has so far lacked. Qualification for this status will be based on the prerequisites of proven knowledge and understanding and probity.

Directors who attain this status will subsequently have to maintain continuing professional development requirements on an annual basis. The institute will also have the power to discipline those who fail to maintain the requisite standard.

This development is a reflection of a changing boardroom environment, where the door is opaque, if not yet transparent, and where the key to future success is seen as providing informed strategic leadership to a motivated and critical workforce.

Incompetent directors will feel uncomfortable; and the scurrilous will be pilloried by their peers, rather than clog the statute books and the courtrooms.

John B Turner, Centre for Director Education, Leeds Business School

Missing the NAO point Your leader on public service agreements (29 April) rightly focuses on a subject of enormous importance to the public sector but one that is poorly understood. Unfortunately, you also missed the key issue by a mile.

You underestimate the importance of both the National Audit Office and the Audit Commission; both do different jobs very effectively. The Public Accounts Committee does not restrain the NAO; even a cursory reading of the relevant legislation would make clear the office’s statutory independence, which is vital to the public audit process and allows the NAO to produce its hard-hitting reports without interference from Whitehall or from parliament.

Parliament, by means of the PAC, follows up the NAO’s work by holding the senior departmental officials to account. In 9 out of 10 cases the government, despite its majority, accepts our recommendations for improvement.

In a typical year, this process saves the public purse well over £300m.

The commission also does a good job and prompts improvement in the areas for which it has responsibility primarily for promoting best practice. It rarely does this by naming and shaming, which has historically been more the approach of the PAC. But the issue on public service agreements is not whether the auditors are ‘up to the job’ but whether they will be allowed to do the job. The government has yet to commit to the audit of performance measures.

My committee has argued performance measures will only be credible if they are independently audited. Without independent audit, performance measures have all the authority of a school report written by the child.

If you want to wage a campaign on public accountability, this is the cause to fight for.

Rt Hon David Davis MP, Chairman, Public Accounts Committee, House of Commons

Shoot yourself in the foot Does professional partisanship no longer exist within senior partners of large accountancy firms?

My conclusion is based on their threat to open up training to the ‘inferior’ bodies of CIMA and ACCA. Here, we have partners threatening the continued existence and influence of their own institute while undermining their own authority – what value a chartered accountant with no institute in a sea of ACMAs and ACCAs?

Surely a case of shooting oneself in the foot?

The partners’ problem is that they recognise that ‘lesser’ institutions have stolen a march in terms of relevance to the market place and must recapture lost ground.

Their attempt to threaten the institute allows interested spectators to see if the tail wags the dog.

Paul Hogarth, via email

A deliferate mistale? In your 29 April issue, the page 1 headline read: ‘PKF and Robsons merger fails’, but on page 16, the photo caption read: ‘Pannell Kerr Forster: one of the four firms already merged this year’.

With whom? Is there something we should know?

Paul Creasey, ACA, Hampton, Middlesex

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