Merger collapse?

Institute merger proposals are a bit like stock market bubbles. Wait long enough, and a new generation of innocents will think they have spotted a dead-cert opportunity. But, as Jon Ashworth reports, greyer heads will nod knowingly and wait for the inevitable collapse

The latest attempt to force consolidation among the UK's six accountants' institutes has more than a touch of dot.com reverie about it. The 'youthful innocent' in this case is the not-so-young Eric Anstee, installed last autumn as chief executive of the Institute of Chartered Accountants in England and Wales.

It was an unusual appointment. A chartered accountant, Anstee, has spent most of his career working in industry. He was finance director of Eastern Electricity in the mid-1990s then took the same role at Old Mutual, the South African insurance group. He helped float Old Mutual on the London Stock Exchange. From 1983-1986, he was seconded to the Treasury as commercial accountancy adviser. Big boardroom salaries and 'golden handshakes' have made him a millionaire, at 53.

So Anstee hardly needs to work. Yet, in seeking a challenge, he signed up with the ICAEW. It was not the obvious destination for a bright executive accustomed to international jet-setting (at Old Mutual, Anstee routinely flew back-to-back between London, Cape Town and New York). He must have had something in mind.

A hint of the agenda emerged when I interviewed Anstee earlier this year. It made no sense, he said, to have all these different institutes, each with their own back office functions. Each had their own agenda, certainly, but there was clear scope for combining mailing lists, admin functions, research resources. He was proposing, in short, a joint venture pooling the neutral resources of at least some of the institutes. The money saved could be ploughed back into training and marketing.

Next we hear, three of the institutes are proposing a merger. Anstee's agenda clearly out-ran itself. But while no-one can doubt his enthusiasm, could it be that he has misread his own profession?

To an outsider, the logic is impeccable: the ICAEW, with 125,000 members, joins forces with the Chartered Institute of Management Accountants (CIMA), with 60,000 members, and the Chartered Institute of Public Finance and Accountancy (CIPFA), with 15,000 members. With more than 200,000 qualified accountants and 85,000 students, the enlarged body will be big enough to make an impact internationally.

Yet the argument ignores the lessons of history. The ICAEW has tried to merge with CIPFA and CIMA in the past ' in 1990 and 1995 respectively ' and failed miserably. As far back as 1970, an attempt was made to merge the six institutes into three, serving England, Scotland and Ireland. That went nowhere.

In Australia, the two local institutes have made four failed attempts to merge in the last 30 years.

In the UK, chartered accountants have always voted down merger proposals. Bluntly, what's in it for them? The ICAEW is an elitist club. Why devalue that membership by opening those hallowed doors to all and sundry?

Anstee, with his commercial agenda, will make a compelling case for a merger, but it will still come down to winning the support of more than two thirds of members. That's no mean feat.

Events might prove me wrong, but I suspect the latest merger round is largely one man's vision. You can't fault Anstee for trying, and he has a few months in which to 'sell' the benefits, but his enthusiasm might prove to no avail.

Not the least of the issues is what to call this great new institute. If anything's going to sink it, it will be finding a name.

Jon Ashworth is business features editor at The Times.