Credit crunch discussion takes ACCA to the heart of Labour
ACCA (the Association of Chartered Certified Accountants) held a high level meeting about the credit crunch with Kitty Ussher MP, Economic Secretary to the Treasury at the recent Labour Party conference. Senior representatives from the Financial Services Authority (FSA), the British Bankers Association (BBA) and Engage Mutual Assurance also attended the event.
Chaired by Steve Priddy, ACCA’s director of technical policy and research, the meeting focussed on a wide range of corporate governance issues, from pay and reward to the role of the boardroom itself. It was also an opportunity for ACCA to trail its soon to be published report called “Climbing Out of the Credit Crunch.”
Steve Priddy said: “It was a very successful meeting with a lively discussion about the credit crunch and its causes. Given recent developments, it is clear that the balance of power in the financial services industry has now moved toward the taxpayer, who will increasingly be alongside the shareholder - a new form of accountability is emerging. There could be a renaissance of the mutual model as part of the need to encourage people to save again. Trust needs to be restored.”
“I said at the event that there needs to be a fundamental rethink of regulation and a separation of retail from investment banking as far as is possible. Retail banking is the relatively dull but worthy activity of taking deposits and making loans. In many cases it has become confused and inextricably linked with other more reckless and risky business models.”
Attendees considered the role of corporate boards - in particular the fact that the stability of the traditional board of directors has been eroded, despite following well-intentioned governance principles such as the separation of Chief Executive from Chairman roles, with up to half of the Board being composed of non executive directors.
Remuneration and reward was also a hot topic at the event. It was said at the meeting that the role of independent remuneration advisers needs to be examined more closely. Their advice and guidance for what they claim to be standard practice in remuneration design needs to be challenged.
Given some of the problems with the Anglo Saxon financial model, attendees said there was a need to explore “non US/UK” corporate governance models, looking internationally for better ideas - or even at cooperative or mutual models where a great deal has been learned and shared over recent years.
ACCA will also be hosting an event to discuss the credit crunch at the Conservative Party Conference.
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Notes to Editors
1. ACCA is the global body for professional accountants. We aim to offer business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management. We have 325,606 students and 122,426 members in 170 countries worldwide.
2. ACCA believes that globalisation of business requires one set of reporting standards. We favour principles-based, not rules-based standards, which is why we support the worldwide implementation of IFRS.
3. ACCA believes that tax systems should be transparent, simplified, fair and certain.
4. Complying with regulations affects SMEs disproportionately, which is why ACCA urges governments and standard setters to ‘think small first'’
For further information please contact:
Helen Thompson, ACCA Newsroom phone: +44 (0)20 7059 5759/ 07725 498 654 e mail: helen.thompson@accaglobal.com