I recently highlighted questions asked by LibDem peer Sharon Bowles on the so-called BEIS External Stakeholders Group in the House of Lords. My reason for doing so was to identify who the government thinks the stakeholders in accountancy are. These were the relevant replies:
And:
What do we learn as a result? Three things I suggest.
The first is that accountancy stakeholders are all, apparently, finance professional. That is not true.
Second, stakeholders are exclusively in large firms. That is not true.
Third, stakeholders in accountancy do not include employees; civil society; the suppliers or customers of business; regulators; our tax authority; local authorities; trade unions and anyone else who might think they have a right to know about the impact companies have in their communities. That is not true.
The message is clear: stakeholders are all very particular industry insiders who have the interests of big business at heart. And that is not true.
The case for rethinking accounting from top to bottom could not be made more clearly. No wonder accounting is failing: it does not even know what it is about and on whose behalf it acts. The time for real reform has arrived.
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Good Lord!
The profession (having been co-opted into wealth acquisition by the system) really is living in a isolation bubble.
Salient!
YES. And typical of our narcissistic twittocracy.
I stand ready to be corrected by someone with greater knowledge but:
Sometime ago you put up a post discussing the notion of corruption. I held a view that we did indeed have a corrupt government. This I think is an example of corruption. It exploits the nature of our constitution and the difference between what Bagehot described as the Dignified and the Efficient parts of the constitution. It further makes use of Convention which Dicey suggested lay in an area outside of parliamentary control and as it is not law beyond the scope of the judiciary. It allows the executive to act (probably through secondary legislation) and yet still claim that the regulation produced is fair. Fairness in Governance is a constitutional concept that has been valid since medieval times when field juries ensured quantitive and qualitative distribution of farming land.
The Government is well aware that the accountancy firms who gave us disasters such as Carillion, Autonomy, Tech Data, Gupta and Patisserie Valerie are all represented on the board. The Government is also aware that nearly 51% of their party funds come from the financial sector. The Government made the selection of board members and excluded the public interests. I suggest that this gives rise to the suspicion that there may be a quid quo pro here. That Baroness Bowles had to use written questions to establish who was represented suggests that there is an attempt at obfuscation by the Government. The information should be a matter of open public record. Surely the Public Accounts Committee have qualified members who could sit on the board to provide Parliamentary oversight and protect the public’s interests. To continue with such a system knowing the above and making no attempt at reform goes beyond unethical. As a deliberate and considered decision I think it is, in the archaic sense of the word, corrupt that is rotting from within. The Government has reneged on it’s sworn duty to protect us as they did with banking.
Many good points
Thanks
But i would nit want to appoint MPs to boards
Fairly tightly stitched up !
To the point of extinction of the real stakeholder
The Greeks and Romans were into all this – or at least the 10% at the apex of their slave economies. Plato wrote 7 books outlining means to sort out corruption, corrupted as he was by being a Greek toff whose ideal societies were for Greek toffs (Republic and Magnesia). Even Spinoza’s secular society for religious tolerance came from his heretic life. None of us would want to live in More’s Utopia for that matter. Flash forward to now and full suffrage. Try to explain how this has happened and my guess is you will be as stumped as I am.
My view is democracy is Persian in origin and a form of elite participative management protected by a sub-elite allowed to vote after a show of oratory. As yet, there is no modern form fit for purpose, much as some of us want everyone to have the dignity of the vote. How could any decent person deprive another of it? Many have made fees writing brilliant constitutions across Africa – it seems to no avail. The answers are likely to lie in the detail of our lives like honest accounting and economics – and potentially – stripped of advertising and illegitimate control – big data in the sense of non-expert-perverted social science. The stakeholder perspective is valid but quickly hits problems. Use a mobile phone and some ‘stakeholders’ will have been people killed for their land in the KIvus for the coltan used in the phones. These people and much worse just don’t count and accounting hides them. Making a loss? Spank out some Repo 105s, take your bonus, get the cv out – accounting won’t spot anything until you are long gone. Which stakeholders did you rob? As accounting covers up all this as though the crimes were victimless and most can’t bear the truth. Post 1830 the people then in positions of Richard’s piece decided the stakeholders in the abolition of slavery were – er – slave owners. Elite corruption and ignorance has been endemic. A new form of collective freedom and government might not allow such a body decisive votes.
I can only say I enjoyed that rant
Archytas
I’m going to say it again: What are you on? I mean it. What are you on? I can’t say I can follow what you are saying word to word but strangely it all seems to make sense at the very end…………….
Remarkable.
‘The Government has reneged on it’s sworn duty to protect us as they did with banking.’
Wow – fantastic turn of phrase Bill. Mind – ‘sworn’? They’re just words Bill – just words to be used by the insincere and capricious types we get in power these days.
I think that what is happening is that circumstance and more importantly time is revealing how hollow our system of Government is in this country.
Also looking at the conduct of the last GE and the BREXIT refer- en-dumb (sic) – whatever idea we had about being a modern democracy is now being tested to destruction.
It’s appalling to watch and be affected by it – also embarrassing – but I hope that it will be worth it in the long run. And that is a really big ‘hope’ BTW.
Am I being a little thick here? Figure 2 only seems to share point (1) of the information requested in the attached question.
Maybe point (2) if points (1) & (2) are assumed to be the same.
Point (3)?
A cynical person might suggest deliberate omission. Unless BEIS is assumed to be the appointing entity in all cases?
It was deliberate, I am sure
OMG it gets worse! The two largest external stakeholder groups impacted by the deficiencies in financial reporting are workers (including pensioners) and small businesses. As you rightly say no wonder accounting is failing. So is democracy.
Thank you.
There are more readers and users of accounts of private investors I reckon yet the UK Shareholders Association UKSA and the UK Individual Shareholders Association ShareSoc are not mentioned or included despite years or decades of existence and losses in AIM etc scams as the ones believeing in the accounts.
May I also mention that it was only 25,000 private investors that had RBS settle for £1.1bn about the fraudulent £12Bn rights issue – the institutions left the private investors with the legal bills and ran off with the cash, which was then devoured by the litigation insurers. Railtrack again another instance of private investor users being deceived by the accounts
There was me hoping for a polemic grade from Richard. I am deeply saddened by the attack on the mythical democracy so easy to fall in love with. The old situationists (Paris 68, Yippies, Angry Brigade) got much of the argument right (stripped of Marxist liberalism and 25 bombs not targeting people in mainland UK). Guy Debord got most of what was needed in print. I forget the jargon. The essence was argument being pre-slewed by a corporatist right able to suborn anything radical to its own purposes. The masses were to be raised from the ‘slightly cross brigade’. Many of the themes continue in analysis of Koch brother networks and so on and such as ‘BBC balance’. In science, we tend to regard objective argument as mythical on biological grounds. The detail is excruciating. I have the start with Quine’s (1953) three issues with empiricism, brain science, Dan Sperber in psychology – the list is long, growing and sadly what’s going on abused by unwarranted abstraction into stuff with ‘neuro’ or ‘evolutionary’ at its head. I could model a neuro-accounting but the term ‘god spare us’ flits into mind. In short, there is a lot of ground in this to understand our plight in such as Brexit. My guess is the ultimate metaphor is the biology of noise – more correctly ‘stochastic fluctuation’ – models of how we know ‘drunken’ dung beetles navigate by the milky way and particularly how we are crunching more data from historic records. My guess (again) is we could restructure argument in terms of reception starting points and responses – capture the circuits sort of stuff. Anyway, I’m off to the pub to meet some other drunken beetles.
The last may be the best idea
Sorry….take a two hour sabbatical