What an extraordinary way to plan an amalgamation. Instead of seeking approval from the elected officials of two accountancy bodies, the Association of Chartered Certified Accountants (ACCA) has ignored their views, and gone direct to their members.
One accountant likened it to a hostile takeover bid. It is worse. Prior to a hostile takeover bid, the bidder usually seeks a meeting with the targeted board. And a hostile bid only follows when that board espouses a very frosty shoulder. No one in the accountancy professions denies the need for a rationalisation among the members. However, the method adopted by the ACCA could well be counter productive. The Irish ends of the targeted bodies - the Chartered Institute of Management Accountants (CIMA) and the Chartered Institute of Public Finance and Accountancy (CIPFA) - did not even receive a courtesy call informing them before the press announcement at 3 p.m. last Tuesday. Hardly a friendly and confidence building approach!
Mr David Leonard, past president of ACCA International and chairman of the task force which looked at the merger proposal, saw no need to inform the Irish sides of CIMA and CIPFA. As an international group it "wasn't driven in Ireland", is how he justifies the omission. Indeed, the ACCA makes that clear in its publicity sent to members and students in Ireland when it talked about restructuring proposals of the "UK-based accountancy profession".
The ACCA has already displayed its confrontational approach. It is locked in a dispute with the diminutive Irish accountancy association, the Institute of Incorporated Public Accountants (IIPA), accusing it of plagiarism and demanding it withdraw its bye-laws and regulations. These accusations have been hotly denied by IIPA, but ACCA is taking High Court action.
Mr Leonard also contended that the London parts of the two bodies (CIMA and CIPFA) were informed "two weeks before we went public". But that is not the way CIMA sees it.
Speaking from London, the president of CIMA, Mr Peter Layhe, told The Irish Times that he was informed for the first time on Tuesday morning when he was told by the ACCA that "something was coming out today. . . we are going to send it to your members". He had "no idea of the content" until 2 p.m., or one hour before the details were announced. There was "no prior consultation". Mr Leonard was adamant that the ACCA did not want to be drawn into discussions. Indeed, the direct way was the best option.
The direct approach to the members was, of course, a deliberate ploy by the ACCA. Mr Leonard pointed to the previous failed merger attempts. "They have all failed in our view particularly because they were top down approaches." The various members, he added, would be getting their packs in what he called an "above board" approach. "We are going to have a concerted effort to see what the members want. . . We are going to the members and, by and large, members of these bodies will ask what does it bring."
As he sees it, the model developed by the ACCA, which has 3,200 Irish members (120,000 internationally), involve an umbrella council overseeing a devolved structure, with three divisions - business, public sector, and practice.
CIMA, with over 2,000 Irish members (47,000 internationally), would fit into the business division, and CIPFA, with some 200 Irish members (13,000 overall), would fit into the public sector. And the tangible carrot would be an estimated £2.5 million savings.
Ironically, the plan makes a lot of sense and the proposed structures are well thought out. The institutions have similar curriculums, though the emphasis is different. CIMA had a scheduled meeting for last Friday but the proposed merger is bound to have dominated the discussions. That body had always been to the forefront in advocating the need for rationalisation. Its web site said "a good proposal to harmonise the structure of the UK profession should always be considered".
However, some of this enthusiasm for a merger will have evaporated as a direct result of ACCA's approach. And CIMA added the rider that it "had no part in the creation of the proposal and that its distribution to members was without the knowledge or consent of CIMA"'.
CIMA is likely to respond to the ACCA proposals shortly, possibly sometime this week. However, by its action, seen as a pre-emptive strike, the ACCA does not seem to care what the elected members of CIMA (or CIPFA) say, or think.
