I mentioned earlier today that we need a new breed of non-exec directors of banks to make re-regulation and re-capitalisation work. The likes of Prem Sikka, Frank Field and Will Hutton, I suggested. The awkward squad who are not afraid to ask difficult questions.
Then I noted an article on the Guardian blog by ACCA president Richard Aitken-Davies. He says:
something has gone seriously wrong with corporate governance. This catastrophic failure highlights the need for ethics and professionalism to be at the heart of business. And in order to change business culture, this ethos needs to be extended to schools and other business professions.
Some of us have been saying that for some time. Welcome to the club. He goes on:
The roles of the chairman and chief executive are ultimately ones of accountability - to shareholders, to customers, to staff and, whether they like it or not, to government, the taxpayer and society at large. But our increasingly well-defined principles of corporate governance have not prevented this crisis. We therefore need to open our thinking to alternative models and, in particular, to the role and effectiveness of independent non-executive directors.
At last: welcome recognition from a UK professional institute that there is an obligation to pay tax. And that companies do not owe their sole responsibility to shareholders (who they cannot identify). He does not end there though; he adds:
And perhaps we accountants haven't said no enough, either. The world of finance has made billions. Those privileged to lead this sector need to explain what is happening and why. They need to be part of the solution, because regulators can't be cleverer than entrepreneurs on the front line. However, where entrepreneurs prove to be negligent or irresponsible, it's right that they should find themselves in court.
I agree with the last sentiment. I agree that these business people (they are not entrepreneurs: they did not risk their own money so they cannot be classified as such) will need to make their knowledge available on regulation. But most of all, they have to be held to account. Those best able to do that are those who saw these issues long before the ACCA did. Remember, it was not long ago they resigned me from one of their committees for asking my own awkward questions about quite shocking comments made by their head of tax, Chas Roy-Chowdhury. The ACCA has a lot to do as yet to get its own house in order, I'd suggest. But this is a welcome start.